Updated September 2026
Where you keep your down payment matters almost as much as how much you save. Canada has three registered accounts that can help, and for first-time buyers they work best together. Here is how each one works, and where your money should sit in the months before you buy.
The First Home Savings Account (FHSA)
The FHSA combines the best parts of an RRSP and a TFSA for first-time buyers.
Who can open one: Canadian residents aged 18 (19 in some provinces) to 71 who haven't lived in a home they or their spouse or common-law partner owned in the current year or the previous four calendar years.
How much: up to $8,000 a year, to a lifetime maximum of $40,000. Unused room carries forward, up to $8,000, so you can contribute as much as $16,000 in a single year.
Tax: contributions are tax-deductible, like an RRSP, and qualifying withdrawals to buy your first home are tax-free, like a TFSA.
Time limit: the account can stay open for up to 15 years or until the end of the year you turn 71. If you don't buy, you can transfer the money to your RRSP tax-free without using up your RRSP room.
If you think you may buy in the next few years, open an FHSA now. Contribution room only starts building once the account is open.
The RRSP Home Buyers' Plan
The Home Buyers' Plan lets first-time buyers withdraw up to $60,000 from their RRSPs, tax-free, to buy or build a home. A couple who both qualify can each withdraw $60,000.
It is a loan to yourself. You repay it to your RRSP over 15 years. Any repayment you miss is added to your taxable income for that year.
Repayments start later for now. If you make your first withdrawal between January 1, 2026 and December 31, 2028, repayments don't start until the fifth year after the withdrawal.
Watch the timing of new contributions. RRSP contributions made in the 89 days before an HBP withdrawal may not be tax-deductible.
Using the FHSA and the HBP together
You can use both for the same home. Two first-time buyers who each max out an FHSA and each use the HBP could have up to $200,000 toward their first home: $40,000 each from their FHSAs and $60,000 each from their RRSPs, plus any investment growth in the FHSAs.
The TFSA
A Tax-Free Savings Account has no home-buying rules at all, which makes it flexible. The 2026 contribution limit is $7,000, and you can withdraw at any time, tax-free. Contributions aren't tax-deductible. A TFSA is a good home for savings beyond your FHSA limit, for the cash you'll need for closing costs, and for buyers who don't qualify as first-time buyers.
Where to hold the money as your purchase date gets close
Registered accounts are containers. You still choose what goes inside them. If you plan to buy within a year or two, many buyers move their down payment into lower-risk holdings, such as high-interest savings or GICs that mature before closing, so a market drop doesn't shrink it right before they need it.
Two practical points:
Deposit insurance. CDIC insures eligible deposits, including GICs, up to $100,000 per category at each member institution, and the FHSA, RRSP and TFSA are each a separate category.
Timing. Your deposit is usually due within 24 hours of an accepted offer, and the rest of your down payment on closing day. Make sure the money isn't locked in a GIC that matures after you need it.
Don't forget the cash on top of your down payment
Land transfer tax, legal fees and the PST on mortgage insurance all have to be paid in cash. Our guide to closing costs for buyers in Ontario walks through a full example.
We are real estate agents, not financial advisors. Confirm your own situation with your financial advisor or the Canada Revenue Agency before you move money.
Talk to us
When you are close to buying, we can help you match your savings to the right home and the right town. Call us at (905) 830-9111, or browse our community guides.
