Use Your RRSP to Buy Your First Home

By Latif Nizamani

If you’re planning your first home purchase, the Home Buyers’ Plan (HBP) is one of the most effective ways to strengthen your position. It allows you to use your own savings to increase your down payment—without taking on additional debt—while maintaining flexibility in repayment.

What You Can Do:

Through the Home Buyers’ Plan, you can withdraw:

• Up to $60,000 per person
• Up to $120,000 per couple
• Tax-free at the time of withdrawal, provided it is repaid under program rules

These funds can be used to boost your down payment or help cover closing costs.

Why Many Buyers Use It?

Stronger Down Payment

A higher down payment can reduce your mortgage amount, lower monthly payments, and improve your overall financing structure.

No Immediate Tax Impact:

Unlike regular RRSP withdrawals, funds withdrawn under the HBP are not taxed upfront—as long as repayment conditions are met.

Structured, Manageable Repayment

Repayment is spread over 15 years, with the first payment starting in the second year after withdrawal. This gives you time to settle into homeownership before repayments begin.

More Buying Power—Without More Borrowing

You are using your own savings rather than increasing your debt, which can help you qualify more comfortably and maintain financial balance.

Important Things to Keep in Mind

• You must generally qualify as a first-time home buyer (with some exceptions, such as separation or disability situations)
• Funds must remain in your RRSP for at least 90 days before withdrawal
• Annual repayments are required over a 15-year period
• If you miss a repayment, the required amount is added to your taxable income for that year

A Smart Strategy—When Used Properly

The Home Buyers’ Plan works best when it is part of a well-structured financial plan. Many buyers today also combine it with the First Home Savings Account (FHSA) to further strengthen their down payment strategy. When used thoughtfully, this approach can improve affordability while keeping your long-term financial goals on track.

Let’s Build Your Plan

Buying your first home is a major decision, and having the right strategy makes a significant difference. I help clients:

• Understand their true price range
• Structure their down payment effectively
• Plan their financing with confidence
• Connect with the right mortgage professionals

If you’re considering buying, let’s have a conversation and build a plan that works for you.

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