Home Buyers' Plan (HBP): Borrow from Your RRSP for a Down Payment

Quick Answer

The Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) to buy or build a home. The amount is tax-free, but you must repay it to your RRSP over 15 years. If you make your first withdrawal between January 1, 2026 and December 31, 2028, you get an extra 3-year delay before repayment starts, meaning repayment begins in the 5th year after withdrawal. For example, a 2026 withdrawal starts repayment in 2031.

You can also use the HBP alongside the First Home Savings Account (FHSA) for the same home, as long as you meet all conditions at each withdrawal.

Withdrawal and Repayment

Maximum withdrawal: $60,000 per person. Couples can each withdraw from their own RRSPs, but the total cannot exceed this limit.
Repayment period: Usually starts the second year after withdrawal, over 15 years. But for 2026-2028 first withdrawals, repayment starts in the 5th year.
Repayment amount: At least 1/15 of the total each year until paid off. Any shortfall is added to your taxable income.

Combining with FHSA

You can use both HBP and FHSA for the same home, but you must meet all eligibility conditions at each withdrawal. There's no required order, but it's often better to withdraw from FHSA first since it's tax-free and doesn't require repayment.

Common Pitfalls

First-time buyer requirement: You usually don't qualify if you've owned a home in the past 4 years.
Must buy within 1 year: If you don't buy a qualifying home within 1 year of withdrawal, you must repay the amount or it becomes taxable.
Missed repayments: If you don't repay the required amount in a year, the shortfall is added to your income.
Form errors: Use Form T1036 (HBP Request to Withdraw Funds from an RRSP) correctly to avoid invalid withdrawals.

Steps

Check eligibility: Ensure you're a first-time buyer and have enough RRSP funds.
Complete Form T1036: Submit to your RRSP provider.
Withdraw funds: Money goes to your account for the home purchase.
Buy a home: Complete the purchase within 1 year.
Start repaying: Begin annual repayments in the specified year.

Official Source

Home Buyers' Plan - Canada.ca