FHSA vs RRSP vs TFSA for Buying a Home

Three registered accounts can help you save for a home — the FHSA, the RRSP (via the Home Buyers' Plan), and the TFSA. Each has different limits and tax rules, and for most first-time buyers the smartest move is to use them in a specific order. Here's how they compare.

Key takeaways

• FHSA: up to $8,000/year and $40,000 lifetime; tax-deductible in, tax-free out for a first home.
• RRSP Home Buyers' Plan: withdraw up to $60,000 tax-free, but you must repay it over 15 years.
• TFSA: flexible and tax-free, with no repayment, but contributions aren't tax-deductible.
• Most first-time buyers should fill the FHSA first, then layer in the RRSP and TFSA.
• HOMEH's Cashback Rebate, the industry's highest, can boost whatever you save.

The quick comparison

Each account helps in a different way. The FHSA is the only one purpose-built for a first home, but the RRSP and TFSA still have a role. Here's how they stack up.

The FHSA: built for first homes

The First Home Savings Account combines the best of both worlds: contributions are tax-deductible like an RRSP, and qualifying withdrawals for a first home are tax-free like a TFSA — with no repayment required. You can contribute up to $8,000 per year, to a $40,000 lifetime maximum. For most first-time buyers it's the first account to fill. Read more in what is the FHSA.

The RRSP Home Buyers' Plan

The Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP tax-free toward a first home ($120,000 for a couple). The catch: you must repay it to your RRSP over 15 years, or the unpaid portion is added to your taxable income. It's powerful if you already have RRSP savings. Details in the RRSP Home Buyers' Plan explained.

The TFSA: flexible backup

The TFSA grows tax-free and you can withdraw any time with no repayment, which makes it a flexible place for savings beyond your FHSA and RRSP. Its downside is that contributions aren't tax-deductible. A common order: fill the FHSA, use the RRSP/HBP if you have room, and hold the rest in a TFSA. See the bigger picture in how much to save before buying.

A simple order to follow

Maximize the FHSA first (deduction in, tax-free out, no repayment), then use the RRSP/HBP if you have room, and park extra savings in a TFSA for flexibility.

Stretch your savings with HOMEH

Whichever accounts you use, HOMEH helps your money go further. Eligible buyers receive the industry's highest Cashback Rebate. Map out your savings with the down payment calculator and explore your options in the first-time home buyer guide for Ontario.

Add cashback on top of your savings

Eligible HOMEH buyers get the industry's highest Cashback Rebate. Estimate yours with the cashback calculator.