If you're saving for your first home and you have money in an RRSP, you may be sitting on more of a down payment than you think. The federal Home Buyers' Plan (HBP) lets first-time buyers borrow from their own RRSPs to buy a home, with no tax on the withdrawal and no interest to pay back. The rules have changed twice in the last two years, both times in buyers' favour. Here's what's current, and what the numbers look like.
What the Home Buyers' Plan is
The HBP lets you take money out of your own RRSPs to buy or build a qualifying home. Normally an RRSP withdrawal is added to your income and taxed, and the bank holds back tax when you take it out. Under the HBP, a withdrawal of up to the limit is not taxed and has no tax withheld, as long as you put it back into your RRSP over time.
Think of it as a loan from yourself. Nobody charges you interest, because the lender is your own retirement account. You pay back exactly what you took out: borrow $60,000, repay $60,000.
What's changed recently
- The limit went from $35,000 to $60,000. Budget 2024 raised the maximum withdrawal per person to $60,000. Each buyer uses their own RRSP, so two first-time buyers purchasing together can take out up to $120,000 between them. The limit is per person, not per household: to get the full $120,000, each of you needs $60,000 in your own RRSP and each of you has to qualify as a first-time buyer. One partner's $120,000 can't be split across both limits. (A spousal RRSP counts as belonging to the spouse it was set up for.)
- The repayment holiday went from two years to five. Budget 2024 also gave buyers who made their first HBP withdrawal between January 1, 2022 and December 31, 2025 an extra three years before repayments begin.
- New: that five-year holiday now runs to the end of 2028. The 2026 Spring Economic Update (April 28, 2026) extended the same relief to first withdrawals made from January 1, 2026 to December 31, 2028. It became law with Royal Assent on June 18, 2026, and the CRA's Home Buyers' Plan page now reflects it. Without this extension, repayments for a 2026 withdrawal would have started in 2028. Now they start in 2031.
When your repayments start
For first withdrawals made from 2022 through 2028, the 15-year repayment period starts in the fifth year after the year of your first withdrawal:
| First HBP withdrawal in | First repayment year | Last repayment year |
|---|---|---|
| 2026 | 2031 | 2045 |
| 2027 | 2032 | 2046 |
| 2028 | 2033 | 2047 |
A repayment counts for a year if you contribute it to your RRSP during that year or in the first 60 days of the next one, and designate it as an HBP repayment on your tax return.
That gives you the first few years of homeownership, when money is often tightest, with nothing owing to your RRSP. You can still repay early at any time if you want to.
The math: what the repayments look like
Your minimum repayment each year is your HBP balance divided by the years left in your 15-year period. If you take out the full amount and repay only the minimum, it works out like this:
The CRA works this out once a year rather than monthly, so the monthly figure is simply the annual amount divided by 12. Many buyers set up an automatic monthly RRSP contribution for that amount so the repayment is never a surprise.
How far does it go?
The typical GTA home, on the September 2026 MLS® Home Price Index composite benchmark, was valued at $917,600. The minimum down payment on that price is 5% of the first $500,000 plus 10% of the rest:
One buyer's full HBP covers most of that. A couple's combined $120,000 covers it outright, with room left for closing costs or a bigger down payment. Your own numbers will depend on the price, the type of home and where you buy.
Who qualifies
- You're a first-time home buyer. For the HBP, that means you didn't live in a home that you, or your current spouse or common-law partner, owned in any of the four calendar years before the year of withdrawal, or earlier in the year you withdraw (not counting the 30 days just before the withdrawal). If you owned a home years ago, you may qualify again.
- You have a written agreement to buy or build a qualifying home in Canada. A mortgage pre-approval on its own doesn't count.
- You intend to live in it as your principal residence within one year of buying or building it.
- You're a resident of Canada when you withdraw and until you buy.
- You buy or build before October 1 of the year after your first withdrawal.
There are exceptions for people going through a separation and for buying a home for a person with a disability. The CRA's pages, linked below, cover them.
Things to watch for
- The 90-day rule. Money has to be in your RRSP for at least 90 days before you withdraw it under the HBP to keep its tax deduction. A contribution made in the 89 days before the withdrawal may not be deductible, so plan ahead.
- Missing a repayment costs you tax. If you repay less than the minimum in a year, the shortfall is added to your taxable income for that year. It's still interest-free, but not penalty-free.
- Repayments aren't a new deduction. You got the tax break when you first contributed, so the money you put back as a repayment doesn't give you another one.
- Your retirement savings pause while the money is out. Money that's outside your RRSP isn't growing tax-sheltered. That's the real cost of the HBP, and it's worth weighing.
- It pairs with the FHSA. If you also have a Tax-Free First Home Savings Account, you can use the HBP and the FHSA on the same home. The FHSA lets you contribute up to $8,000 a year and $40,000 in total, and qualifying withdrawals are tax-free and never have to be paid back.
How to use it
Fill out CRA Form T1036 and give it to your RRSP provider for each withdrawal. Talk to your lender and your bank or advisor early, so the money is in the right place, has been there for 90 days, and arrives in time for your closing.
Your first-time buyer checklist
The Home Buyers' Plan is one piece. These are the things every first-time buyer should check before writing an offer.
- Check that you count as a first-time buyer for each program. They don't all use the same test. The HBP and the FHSA look back four years. Ontario's land transfer tax refund (up to $4,000) requires that you've never owned a home anywhere in the world. In Toronto, a separate municipal refund of up to $4,475 applies on top.
- Get a mortgage pre-approval with a rate hold. Lenders qualify you at the higher of your contract rate plus 2% or 5.25%, so you need to know what you qualify for at that rate, not just the advertised one.
- Line up your down payment, and its timing. Add up your RRSP (HBP), FHSA and savings. RRSP money needs to have been in the plan for 90 days. With less than 20% down, a mortgage default insurance premium is added to your loan, and first-time buyers can choose an amortization of up to 30 years on an insured mortgage.
- Have your deposit ready. It's usually due within a day or so of your offer being accepted, so it needs to be sitting in your account, not still in an RRSP.
- Budget for closing costs. Land transfer tax (paid twice in Toronto, once to the province and once to the city), legal fees, title insurance, a home inspection and adjustments for property tax or condo fees. These come on top of the down payment.
- Buying new? Check the new-home rebates. First-time buyers can get back 100% of the GST on a new home up to $1 million, with a partial rebate up to $1.5 million, and Ontario has its own first-time buyer rebate on the provincial part of the HST (up to $80,000). Eligibility and dates apply to both, so confirm with your builder and lawyer.
- Work out the true monthly cost. Mortgage payment, property tax, home insurance, utilities and any condo fees, plus your HBP repayment once it starts. Keep an emergency fund after closing.
- Check the home, not just the price. Make your offer conditional on financing and a home inspection where you can, and for a condo have your lawyer review the status certificate.
- Have your team in place first. A lender or mortgage broker, a real estate lawyer and an agent, all lined up before you start writing offers.
The bottom line
The Home Buyers' Plan is one of the few interest-free ways to build a down payment, and with the five-year holiday now running through 2028, buyers who start in 2026, 2027 or 2028 get the same extra breathing room before their first repayment is due. If you're thinking about buying in the next couple of years, it's worth checking how much you have in your RRSP and whether your timing works. We're happy to walk through the numbers on a specific home with you.
This article is general information based on the Canada Revenue Agency's published Home Buyers' Plan rules (What is the Home Buyers' Plan, Participating in the HBP, Repaying the HBP), the Department of Finance's Budget 2024 announcement and the 2026 Spring Economic Update, current as of October 15, 2026. The checklist also draws on Ontario's land transfer tax refund for first-time homebuyers and the CRA's first-time home buyers' GST/HST rebate. The repayment figures assume the full withdrawal and the minimum repayment each year. The benchmark price is the TRREB/Altus MLS® Home Price Index composite for September 2026. It is not tax, mortgage or financial advice. Please confirm your eligibility with the CRA, your financial institution or a tax professional before you withdraw.
