Find the optimal way to save for your down payment. See why mixing the FHSA and HBP beats using just one account.
The CRA legally requires you to repay your HBP loan over 15 years using after-tax dollars. The FHSA, however, requires zero repayment.
Understanding the FHSA, the HBP debt trap, and the N01 Labs Waterfall Strategy.
Yes, almost always. The FHSA gives you a tax deduction when you contribute, and the withdrawal is completely tax-free. The HBP gives you a tax deduction, but you must repay the withdrawal over 15 years.
Yes! You can combine both accounts for the exact same home purchase. The optimal strategy is to max out your $8,000/year FHSA limit first, and put any leftover savings into the HBP.
No. There is no such thing as a joint FHSA/HBP account. The 'Combo' strategy simply means you open two separate accounts (an FHSA and an RRSP). You prioritize filling the FHSA first because it has no repayment rules, and only use the RRSP (for the HBP) as a backup when the government caps your FHSA contributions.
No. An FHSA or RRSP is just a tax-sheltered 'basket'. To actually earn compound interest, you must actively use the cash inside the account through your brokerage to buy safe investments like GICs, bonds, or HISA ETFs. If you just leave it as cash, it earns almost zero interest.
If you don't buy a house within 15 years, you can transfer your FHSA funds directly into a retirement account tax-free, without needing any extra contribution room. It's essentially bonus retirement space.
The TFSA acts as our 'baseline' control group. Because TFSA contributions do not generate a tax refund, it shows you exactly how much 'free money' you are gaining by using the tax deductions from the FHSA or HBP to boost your down payment.