2026 HBP Rules and Limits
| Feature | 2026 Rules |
|---|---|
| Maximum withdrawal | $60,000 per person ($120,000 per couple) |
| Eligibility | First-time home buyer (not owned in past 4 years) |
| Repayment start | Second year after withdrawal (5-year grace period from 2024+) |
| Repayment period | 15 years |
| Minimum annual repayment | 1/15 of withdrawn amount |
| Missed repayment consequence | Amount added to taxable income |
How the Home Buyers' Plan Works
When you withdraw under the HBP, the funds come out of your RRSP without triggering the usual withholding tax or income inclusion. You must have a written agreement to buy or build a qualifying home, and the home must be intended as your principal residence. The withdrawal must occur within 30 days of closing.
Repayment begins in the second year following withdrawal (extended to five years for withdrawals made after April 2024). Each year, you must repay at least 1/15 of the original withdrawal amount back to your RRSP. If you miss a repayment, that year's required amount is added to your taxable income — effectively converting the tax-free withdrawal into a taxable one for that portion.
Should You Use the HBP? A Financial Analysis
The HBP provides what is essentially a 15-year, interest-free loan from yourself. The true cost is the opportunity cost of removing investments from tax-sheltered growth. For a $60,000 withdrawal that would have earned 7% annually, the forgone growth over 15 years of gradual repayment amounts to approximately $35,000-$45,000 in lost tax-deferred compounding.
However, if the alternative is a larger mortgage at current interest rates, or if the HBP enables you to avoid CMHC insurance premiums by reaching 20% down payment, the math may favour using it. The decision depends on your mortgage rate, expected investment returns, and whether you will actually make the repayments on schedule.
HBP Strategy for Professionals
Some professionals strategically contribute to their RRSP specifically to use the HBP — making a large contribution, claiming the deduction, then withdrawing under HBP shortly after. This effectively converts the tax deduction into a down payment subsidy. However, RRSP contributions must be in the account for at least 90 days before HBP withdrawal to avoid the anti-avoidance rule.
Combining HBP with FHSA
Since 2023, the First Home Savings Account (FHSA) provides an additional $40,000 in tax-deductible, tax-free savings specifically for home purchases. Combined with the HBP's $60,000, a first-time buyer can access $100,000 per person ($200,000 per couple) in tax-advantaged home purchase funds. For young professionals early in their careers, maximizing both programs before purchasing provides significant financial advantage.