The RRSP Home Buyers' Plan explained
The Home Buyers' Plan (HBP) lets first-time buyers pull money from an RRSP tax-free toward a home, then pay it back over 15 years. Here's how it works and what the repayments look like.
Borrowing from your future self
The Home Buyers' Plan (HBP) lets a first-time buyer withdraw from a Registered Retirement Savings Plan (RRSP) tax-free to put toward a home. The catch is in the name “plan”: it's really an interest-free loan from yourself that you must repay to the RRSP over 15 years.
The repayment maths
You repay the amount you withdrew in roughly equal instalments over 15 years, starting a couple of years after the withdrawal. Here's how a maximum withdrawal works out:
| Home Buyers' Plan | Amount |
|---|---|
| Withdrawn from RRSP (tax-free) | $60,000 |
| Repayment period | 15 years |
| Minimum repayment per year | ≈ $4,000 |
| Miss a year's repayment? | That portion is taxed as income |
If you don't repay a year's share, that amount is added to your taxable income for the year — so the discipline of repaying matters.
What it means for your mortgage
The $60,000 you withdraw goes straight onto your down payment. Here's how that changes the mortgage on a $500,000 home, versus a 5% down payment:
| 5% down | With the HBP | |
|---|---|---|
| Down payment | $25,000 | $85,000 |
| Mortgage (amount borrowed) | $475,000 | $415,000 |
| Monthly payment | $2,899 | $2,533 |
| Total interest over 25 yrs | $394,808 | $344,937 |
- Total interest paid
Using the account, your monthly payment is about $366 lower and you pay roughly $49,870 less interest over the life of the loan.
The trade-off
The HBP can unlock savings you already have in an RRSP — useful if that's where your money sits. But you're pulling from retirement, and that money is out of the market (not growing) until you repay it. For many first-time buyers the FHSA is simpler because there's nothing to pay back — though you can use both together for the same purchase.
See your monthly payment once you have a deposit in mind on the mortgage calculator.
This page is general educational information to help you think it through — not financial, tax, or legal advice. Your own situation is unique; consider speaking with a qualified adviser before making a big decision. See how we calculate and our Privacy Policy.