FHSA vs RRSP Comparison
Compare Canada's First Home Savings Account (FHSA) vs RRSP Home Buyers' Plan (HBP). Calculate the best way to save for a home in Canada.
Interactive Comparison Simulator
Adjust the variables below to simulate outcomes, compare interest rates, and see real-time projections.
Side-by-Side Comparison
A direct comparison of features, rules, limits, and eligibility requirements.
| Feature / Detail | FHSA | RRSP (HBP) |
|---|---|---|
Tax Treatment on Payout | 100% Tax-Free (no repayment needed) | Tax-Free withdrawal, but MUST repay within 15 years |
Annual Limit | $8,000 (up to $40,000 lifetime) | Up to $60,000 withdrawal (HBP limit in 2024) |
Entry Tax Benefit | Yes (contributions are tax-deductible) | Yes (contributions are tax-deductible) |
Inflation Protection | Low (eroded by inflation) | High (beats inflation long-term) |
Management Effort | None (passive) | Low (automated or index-tracked) |
Pros & Cons Breakdown
Analyze the advantages and drawbacks of each financial product before making a decision.
FHSA Pros & Cons
Advantages
- Tax-deductible contributions + tax-free withdrawals (double benefit).
- No requirement to repay the funds.
- Unused space can roll over to RRSP tax-free if you don't buy a home.
Disadvantages
- Lifetime cap is restricted to $40,000.
- Account must be closed after 15 years.
- Only available to first-time homebuyers.
RRSP (HBP) Pros & Cons
Advantages
- Allows withdrawing up to $60,000 under the Home Buyers' Plan.
- Larger contribution room limits.
- Excellent if you already have funds in an RRSP.
Disadvantages
- Must repay the borrowed HBP amount back to your RRSP over 15 years.
- Repayments are not tax-deductible.
- Missed repayments are added to taxable income.
The Verdict
FHSA is the absolute best option for first home savings; RRSP is a secondary top-up.
The FHSA offers a superior structure because it combines tax-free growth and deductions with no repayment requirements. You should fully fund the FHSA first, then use the RRSP Home Buyers' Plan for additional funding.
Choose FHSA if...
Canadian first-time buyers wanting tax deductions without debt repayment.
Choose RRSP (HBP) if...
First-time buyers needing more than $40,000 to buy, utilizing existing RRSP holdings.
Frequently Asked Questions
Common questions answered regarding FHSA and RRSP (HBP).
Yes. You can combine both the FHSA and the RRSP Home Buyers' Plan to purchase your first home in Canada.
If you don't buy a home within 15 years, you can transfer your FHSA funds directly to an RRSP or RRIF tax-free, without affecting your contribution room.
This comparison is reviewed regularly and updated when tax laws, interest rates, or contribution limits change in the country.