Model RRSP Home Buyers' Plan withdrawal and 15-year repayment.
Annual repayment required
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Tax cost of missed payments
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Your breakdown
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Borrowing from your own RRSP for a first home
The Home Buyers' Plan lets a first-time buyer pull money out of an RRSP without paying tax on the withdrawal, on the condition that you pay it back to yourself over time. As of 2024 the limit rose to $60,000 per person, so a couple buying together can draw up to $120,000 between them. It is, in effect, an interest-free loan from your future retirement. This calculator focuses on the part people underestimate: the repayment, and what it costs you if you miss it.
The 15-year clock and the year-two start
Repayment is spread over 15 years, and the schedule does not begin immediately. You get a grace period, with the first installment due in the second year after the year of withdrawal. Each year you must return one-fifteenth of what you took out. The mechanism is a designated repayment on your tax return: you contribute to your RRSP and tell the Canada Revenue Agency to count it as an HBP repayment rather than a new deduction. Skip it, and that year’s required amount is added to your taxable income.
A $60,000 withdrawal with three missed years
Take the maximum $60,000 withdrawal. One-fifteenth is $4,000 a year. Now suppose life gets tight and you miss three of those annual repayments while sitting at a 35 percent marginal rate. Each missed $4,000 is treated as income, taxed at 35 percent, so the cost compounds across the misses.
The bars compare the planned, painless path against the cost of skipping. Make every repayment and the tax cost is zero. Miss three at 35 percent and you have handed the government $4,200 you did not need to.
A timing trap with the 90-day rule
The HBP works best when the money has been in the RRSP for a while. Contributions must sit in the account for at least 90 days before you withdraw them under the plan, or the Canada Revenue Agency can deny the deduction on those contributions. A buyer who scrambles to stuff an RRSP days before closing, hoping to grab the deduction and the HBP withdrawal at once, can lose the deduction entirely. The other common slip is missing the year-two start date, then being surprised when a repayment quietly appears as income. A practical tip: set a recurring reminder for each HBP repayment, because the CRA tracks your remaining balance on your annual notice of assessment but will not chase you to pay it.
Frequently asked questions
Can I use the HBP and the FHSA together?
Yes, and combining them is often the strongest first-home strategy available to Canadians. The First Home Savings Account gives a deduction going in and tax-free withdrawals for a home, with no repayment required, while the HBP lets you tap an existing RRSP for up to $60,000. Stacking both can pull well over $100,000 toward a down payment per person, though the FHSA money never has to be paid back and the HBP money does.
Do I lose the investment growth while the money is withdrawn?
Effectively, yes, and it is the real cost of the HBP that no tax line shows. Money pulled from your RRSP stops compounding until you repay it, so over 15 years you forgo the growth those dollars would have earned. The trade can still be worth it if owning a home sooner beats renting, but treat the HBP as a loan with an opportunity cost, not as free money.