If you are wondering how to use the Home Buyers Plan for a down payment, the process is straightforward. The Home Buyers’ Plan lets eligible first-time buyers withdraw up to CAD 60,000 from their RRSPs for a qualifying home.
Withdrawals are not taxed at the time, but you must repay the total amount to your RRSPs over a maximum of 15 years. There is temporary repayment relief for certain withdrawals made between 2022 and 2025 which can delay the start of your repayment schedule.
Treat the HBP as a loan from your retirement savings to yourself and plan the repayments before you withdraw.
What the HBP does?
The HBP allows you to use your RRSP savings as a deposit without immediate tax. You withdraw money, buy a qualifying home, and then put the money back gradually. The key points to keep in mind are:
This is not a grant or subsidy. The money comes from your own retirement funds.
The withdrawal is tax free only if you follow the HBP rules and repay on schedule.
You may withdraw from eligible RRSP accounts only. Some employer or locked plans are excluded.
Use the HBP only after comparing alternatives, such as saving longer, a family gift, or other first-time buyer accounts.
How to Use The Home Buyers Plan for a Down Payment?
Want to buy your first home faster? The Home Buyers Plan lets you use your RRSP for the down payment.
Withdraw up to $35,000 from your RRSP tax-free ($70,000 for a couple) to use as a down payment.
Must be an eligible first-time buyer and intend to live in the home.
Repayments start in year 2 after withdrawal and are spread over 15 years.
Missed annual repayments are added to your taxable income.
To withdraw, complete the CRA HBP forms and keep records of withdrawals and repayments.
Must Check: Best Guide on First-Time Home Buyer Tips Ontario
Who can use the Home Buyers’ Plan (HBP)?
The rules are simple but there are common pitfalls. Check these before you act:
First-time buyer condition
Usually means neither you nor your spouse or common-law partner owned a home in the previous four years.
Special rules
There are exceptions for persons with disabilities and for couples where only one partner is a first-time buyer. Confirm which rule applies to you.
HBP is separate from mortgage approval
Using HBP funds does not guarantee a mortgage. Lenders still assess income, credit, and affordability.
Complex situations need advice
Prior ownership abroad, property held in another name, recent inheritances, or unusual family setups can complicate eligibility. Seek guidance early.
Quick eligibility checklist
Recent T4s or other income proof
Evidence of no home ownership in the past four years (if needed)
Valid photo ID
Doing this prep early reduces delays and helps you move faster when you’re ready to withdraw funds.
How much you can withdraw and practical currency note
Limit per person: You can withdraw up to CAD 60,000 from your RRSP under the Home Buyers’ Plan.
Limit for couples
If both partners qualify, a couple can access up to CAD 120,000 combined.
Per person total, not per account
The CAD 60,000 limit applies to each person in total. You may split withdrawals across multiple RRSP accounts, but the combined amount must not exceed the limit.
Tax treatment
Most institutions do not withhold tax on valid HBP withdrawals within the limit. Practices can vary, so confirm with your RRSP provider.
Issuer rules and timing
Some RRSP issuers require funds to be on deposit for a set period before withdrawal. Check with your provider to avoid delays.
Impact on lending
Withdrawing reduces your RRSP balance and may affect mortgage insurance calculations or lender deposit requirements.
Practical planning note
When deciding how much to withdraw, include all closing costs: deposit, solicitor or notary fees, land transfer tax, any mortgage insurance, plus a contingency buffer of about 1–2% of the purchase price so you do not underfund completion.
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When Repayments Start: Standard Rule
Using the Home Buyers Plan is easy, but do you know when repayments actually begin?
You have 15 years to repay the full HBP amount.
The minimum annual repayment is 1/15 of the total withdrawn.
Repayments normally begin in the second year after the year you withdraw.
Example: withdraw in 2024 → first minimum repayment normally due in 2026.
Temporary Relief Example (withdrawals in 2022–2025)
With withdrawals made between 2022 and 2025, you get extra breathing room before repayments begin.
For certain withdrawals made between 2022 and 2025, the start of the 15-year repayment period may be delayed, moving the first required repayment to a later year.
Example: withdraw in 2024 → normal first repayment 2026 → under the temporary relief the first repayment could be 2029.
Confirm whether the relief applies to your withdrawal year before relying on the delay.
Simple Repayment Math
Withdraw CAD 30,000 → annual minimum = 30,000 ÷ 15 = 2,000 per year → monthly equivalent ≈ CAD 166.67.
Withdraw CAD 60,000 → annual minimum = 60,000 ÷ 15 = 4,000 per year → monthly equivalent ≈ CAD 333.33.
Quick Practical Notes
A few simple pointers can make using the Home Buyers Plan much smoother
You may repay more than the minimum in any year.
If you miss the required annual minimum, the missed amount is reported as taxable income for that year.
Always confirm the exact repayment start date that applies to your withdrawal with CRA or your tax advisor before budgeting.
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Key Paperwork And Practical Steps to Withdraw: Step by Step
A no fuss checklist to guide your HBP withdrawal from start to finish.
Confirm eligibility
Verify you meet the first-time buyer condition and that the property qualifies. Keep proof of eligibility.
Check RRSP accounts
Identify which RRSP account(s) hold the funds and confirm whether any funds are locked, restricted, or subject to a holding period.
Decide the withdrawal amount
Calculate total needs: deposit, legal fees, land transfer tax, mortgage insurance, and a contingency buffer. Decide how much to withdraw from each account.
Request the HBP withdrawal form
Ask your RRSP issuer for their official Home Buyers’ Plan withdrawal form and any instructions or ID requirements.
Complete and submit the form
Fill in the form, attach required ID and account details, and send it to the RRSP provider.
Get written confirmation
Ask the issuer to confirm in writing the withdrawal date and exact amount to be released. Keep copies of the form and the confirmation.
Notify your lender early
Provide your lender with proof of the source of funds as soon as you have confirmation so they can include it in your mortgage file.
Track timing and receipts
Note the processing timeline, save bank statements or remittance advices showing the transfer, and retain all paperwork for tax and lender purposes.
Sample Email to RRSP Provider
Here’s a quick sample email to make contacting your RRSP provider stress free.
Subject: Request for HBP withdrawal procedure and requirements
Hello,
I am planning a Home Buyers’ Plan withdrawal and would like to confirm the procedure for withdrawing CAD [amount] from my RRSP account [account number]. Please confirm:
Whether this account is eligible for HBP withdrawals
Any waiting periods or restrictions on the funds
Whether tax will be withheld on the withdrawal
The documents you require and typical processing times
Thank you,
[Your name]
[Phone]
[Email]
Sample Email to Lender
Subject: Using HBP funds for deposit and documentation request
Hello,
I am applying for a mortgage and plan to use funds from the Home Buyers’ Plan for my deposit. Please confirm:
What documentation you require to evidence these are HBP withdrawals
How you will treat them for deposit verification and stress test purposes
Any timing considerations we should be aware of
Best regards,
[Your name]
[Phone]
[Email]
Timing note
Processing can take from a few days to several weeks depending on the RRSP provider, whether additional documentation is needed, and solicitor or valuation timing.
Start the withdrawal process well before your completion date and coordinate closely with your lender and solicitor.
Repayment Mechanics: Exactly How to Handle Repayments
Straightforward steps, clear examples, and the exact math so you can budget with confidence.
How it works?
Make an RRSP contribution: Put money into any RRSP account (does not have to be the original account).
Designate the contribution as an HBP repayment: On your tax return for that year. That tells the tax authority the contribution repays your HBP balance.
Keep receipts: For every RRSP contribution and any bank/transfer records. You will need these if asked.
Missed minimums are taxed: Any required annual repayment you do not make is added to that year’s taxable income.
You may overpay: In any year to reduce future required payments.
The Rule And The Formula
Worked Arithmetic (digit-by-digit)
If you withdraw CAD 30,000:
30,000 ÷ 15 = 2,000.
Monthly equivalent = 2,000 ÷ 12 = 166.666… so ≈ CAD 166.67 per month.
If you withdraw CAD 60,000:
60,000 ÷ 15 = 4,000.
Monthly equivalent = 4,000 ÷ 12 = 333.333… so ≈ CAD 333.33 per month.
Timing Example (normal rules)
Year 1 = withdrawal year → no repayment due.
Year 2 = first repayment due (annual minimum as above).
Years 3–16 = continue annual minimum payments until the full amount is repaid.
If temporary relief delays the start date for your withdrawal year, the same arithmetic applies but the sequence of years shifts; the 15-year total still governs once the repayment period begins.
Practical Tips And Pitfalls
Here’s how to make the most of the Home Buyers Plan without falling into traps.
You do not need to repay into the original RRSP account: But you must have contribution receipts and designate repayments on your tax return.
Repayments are not automatic: You must actually contribute and then claim the repayment on your return.
Interaction with RRSP deduction room: Can be tricky. If you plan to both claim an RRSP tax deduction and designate the same contribution as an HBP repayment in the same year, speak to an accountant because timing and deduction rules matter.
Overpay if you can: It reduces future mandatory payments and avoids the risk of taxable missed minimums.
Set calendar reminders: For each repayment year and keep a simple spreadsheet of amounts, dates, and receipts.
One-Line Checklist: Calculate annual minimum → make RRSP contribution → keep receipt → designate as HBP repayment on your tax return → repeat each year until repaid.
Interaction With Other Accounts And Rules to Watch
Before using the HBP, check how it interacts with your other accounts.
89-day contribution window
Contributions made within 89 days before an HBP withdrawal can have special tax or timing consequences. If you plan to claim an RRSP deduction for the same contribution year or to use recent contributions as HBP repayments, timing matters.
How to avoid trouble: plan contribution timing in advance and check with your tax advisor before making last-minute deposits.
Locked-in plans and employer pensions
Some employer plans and locked-in RRSPs are not eligible for HBP withdrawals. Assume not all registered plans are usable until you confirm.
How to avoid trouble: contact your issuer early and verify which accounts are eligible.
Using HBP together with other programs (for example FHSA)
It is often possible to use both HBP and other home-savings programs, but each has its own conditions and interactions. Using multiple programs can affect your overall funding, tax position, and lender assessments.
How to avoid trouble: confirm the rules for each program and run the numbers or get advice so you do not inadvertently disqualify benefits or create tax complications.
Gifts, loans, and the source of your deposit
Lenders and tax authorities may closely review deposits that are described as gifts or loans. Undocumented gifts or disguised loans can cause delays or rejection.
How to avoid trouble: obtain a clear signed gift letter, keep the transfer trail, and declare any loans openly with supporting paperwork.
Impact on retirement planning
Withdrawing RRSP funds reduces future compound growth and may change your retirement outlook. The short-term benefit of home ownership should be weighed against the long-term cost to retirement savings.
How to avoid trouble: run a simple projection comparing expected returns lost against housing benefits or speak to a financial planner.
Quick Practical Checklist
Confirm eligibility of each RRSP account before planning withdrawals.
Avoid last-minute contributions in the 89-day window without checking tax effects.
Get written documentation for any gifted deposit and a clear repayment plan for any loan.
Check whether using other programs affects eligibility or tax treatment.
Run a basic retirement impact projection or get independent advice.
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How HBP affects mortgage qualification and what lenders want to see?
Using the HBP is helpful, but lenders still check more than just your down payment.
What lenders will typically ask for
A copy of the completed HBP withdrawal form from your RRSP issuer.
Recent RRSP statements showing the balance before and after the withdrawal.
Bank statements or a remittance reference showing the funds were transferred to you or to your solicitor.
Written confirmation from the RRSP provider of the withdrawal date and exact amount.
The signed purchase agreement or proof of deposit to link the funds to the transaction.
How lenders treat HBP funds in underwriting
Lenders will accept HBP funds as a legitimate source of down payment when properly documented.
Lenders still run affordability tests and apply stress testing. Even though HBP withdrawals are not a loan, lenders will want to see how HBP repayments fit your budget. Some lenders may treat prospective repayment obligations as part of affordability checks.
Mortgage default insurance and loan to value rules remain based on the size of your deposit and the loan amount. Using HBP does not change insurance thresholds or eligibility rules.
Different lenders and underwriters have different operational checks and documentation preferences. That means product access and pricing can vary depending on the lender’s view of HBP funds.
Practical lender concerns and how to address them
Prove the source: provide a clear paper trail from RRSP to deposit.
Show timing: confirm the withdrawal date so the lender or solicitor can align completion timing.
Demonstrate affordability: include HBP repayment amounts in your household budget or explain why repayments will not strain cashflow.
Confirm transfer route: tell the lender whether funds go direct to solicitor or into your account and show the remittance.
Ask about lender policy before you withdraw: a mortgage broker can check lender-specific rules and likely product impact so you avoid surprises.
Quick Borrower Checklist
Obtain written confirmation of withdrawal date and amount from your RRSP issuer.
Save RRSP statements and bank remittance advice showing the transfer.
Give your lender the HBP form, withdrawal confirmation, and purchase agreement early.
Add the HBP annual repayment (total withdrawn ÷ 15) to your affordability spreadsheet.
Speak to a broker if you want to confirm product access or pricing implications before you withdraw.
Short summary: HBP funds are acceptable as a deposit when fully documented, but lenders still stress test affordability and follow the usual insurance and LTV rules. Preparing paperwork and checking lender policy in advance keeps the mortgage process smooth.
Pros And Cons
Is the HBP right for you? Let’s break down the pros and cons.
| Pros | Cons |
| Quick, tax-free access to a meaningful down payment. | Cuts your retirement savings and future compound growth. |
| Repayments are interest free — you’re paying yourself back. | Annual repayment commitments can clash with life changes. |
| Can let you buy sooner in a rising market. | Missed repayments become taxable income. |
| Both partners can withdraw, increasing available funds. | Some RRSPs are ineligible, limiting access. |
| Avoids taking on extra debt for the deposit. | May affect lender calculations or mortgage insurance indirectly. |
Practical Tips And Sensible Cautions
Smart tips and a few cautions can help you use the HBP wisely.
Model the retirement impact
Rationale: RRSP withdrawals reduce long-term compound growth.
Action: run a simple projection comparing future value at retirement with the short-term benefit of buying now.
Automate repayments
Rationale: missed HBP minimums become taxable income.
Action: set up a standing RRSP contribution each year sized to at least your HBP minimum.
Document everything
Rationale: lenders and tax authorities want a clear paper trail.
Action: keep digital and printed copies of withdrawal forms, confirmation letters, bank remittances, and closing documents.
Start early on timing
Rationale: processing, solicitor steps and valuations take time.
Action: begin HBP paperwork well before your completion date to avoid last-minute delays.
Check mortgage insurance and LTV effects
Rationale: using RRSP funds does not change insurance rules or LTV thresholds.
Action: confirm how your post-withdrawal deposit level affects mortgage default insurance and product choice.
Consider partial withdrawals
Rationale: taking less reduces future mandatory repayments and preserves retirement savings.
Action: withdraw only what you need for deposit plus closing costs and a small contingency.
Plan for life changes
Rationale: job changes, moves, or separation can make 15 years of repayments harder.
Action: factor foreseeable life events into your decision before withdrawing.
Watch the 89-day contribution window
Rationale: recent contributions can have special tax/timing effects.
Action: avoid last-minute deposits in the 89 days before withdrawal without tax advice.
Verify account eligibility and locked-in rules
Rationale: not all registered plans are withdrawable under HBP.
Action: check each RRSP/locked plan with the issuer before relying on the funds.
Coordinate with your broker and solicitor
Rationale: lenders need proof of funds and timing; solicitors need funds to complete.
Action: notify broker and solicitor early and share withdrawal confirmation as soon as you have it.
Be transparent about gifted deposits or loans
Rationale: undocumented gifts or disguised loans attract scrutiny.
Action: obtain a signed gift letter and keep the transfer trail; declare any genuine loans with paperwork.
Consider tax and deduction timing
Rationale: repaying and claiming RRSP deductions in the same year creates complexity.
Action: speak to an accountant if you plan to both claim a deduction and designate the contribution as an HBP repayment in the same year.
Keep a contingency buffer
Rationale: closing costs and unexpected fees can exceed estimates.
Action: include 1–2% of the purchase price as a buffer when deciding your withdrawal amount.
Must Check: Best Tips for First Time Home Buyers Canada
HBP Action Plan
Turn the Home Buyers Plan into a clear action plan you can follow
Before you withdraw
Confirm first-time buyer status for the relevant years (you and your spouse or common-law partner).
Check each RRSP account for eligibility and any lock or hold periods.
Calculate total needs: deposit, solicitor fees, land transfer tax, mortgage insurance, and a 1–2% contingency.
Speak with a mortgage broker or lender to confirm how they will treat HBP funds for deposit, affordability and insurance.
Paperwork to request and complete
Request HBP withdrawal form from RRSP issuer.
Complete form and attach required ID and account details.
Ask the issuer how funds will be transferred (to you or to solicitor) and whether any processing time or holds apply.
Submit and confirm
Send completed form to RRSP provider.
Request written confirmation showing: withdrawal date, exact amount, and remittance or transaction reference.
Save copies of the form, confirmation, and any remittance advice.
Notify key parties
Send confirmation and proof of funds to your lender or broker early in the mortgage application.
Share timing with your solicitor so closing dates align with fund availability.
Budget and timing
Note repayment start: normally year 2 after withdrawal. If relief applies check the special start date for your withdrawal year.
Calculate annual minimum: total withdrawn ÷ 15. Add this to your household budget.
Automate RRSP contributions equal to your annual minimum to avoid missed minimums.
Tax and record keeping
Keep RRSP contribution receipts, withdrawal confirmation, bank statements, and tax returns showing HBP designations.\
If you plan to both claim an RRSP deduction and designate the same contribution as an HBP repayment in one year, consult an accountant about timing.
Practical safeguards
Consider partial withdrawals if you do not need the full amount.
Get a signed gift letter and transfer trail for any gifted deposit.
Check the 89-day contribution rule before making last minute deposits.
Model retirement impact before withdrawing large sums.
Sample quick email prompts
To RRSP provider: request withdrawal form, confirm eligibility, processing time, withholding policy, and transfer method.
To lender: confirm documentation needed, how HBP funds count for deposit and stress testing, and timing expectations.
Short Checklist Before You Withdraw
A short checklist to keep your HBP withdrawal smooth and stress free.
☐ Confirm you meet HBP first-time buyer rules and any special conditions that apply.
☐ Verify which RRSP accounts are eligible and identify any locked or restricted plans.
☐ Agree the exact withdrawal amount and include a buffer for deposit, fees, taxes, and contingency.
☐ Check whether your RRSP provider withholds tax on the withdrawal and confirm timing.
☐ Confirm with your lender or broker how HBP funds will be documented, treated for deposit, and affect mortgage insurance.
☐ Plan and automate annual HBP repayments so you will never miss the minimum.
☐ Collect and save written confirmation of the withdrawal date, amount, and transfer reference.
Final Note
The Home Buyers’ Plan can help first-time buyers get into a home sooner, but use it carefully. Check eligibility, know exactly when and how you must repay, and keep a safety buffer for closing costs, moving, and repairs. Think about the long-term effect on your retirement savings before you withdraw.
Keep good records. Save your RRSP and lender paperwork and note repayment dates so you do not get surprised at tax time. Treat the HBP as one tool in your toolbox, not the only option.
Need help?
AJP Mortgage can run the numbers for you, draw up a simple repayment timeline, or make a short checklist to take to your broker or tax advisor. Contact AJP Mortgage to compare options and see what works best for your situation.
