Are you a first-time homebuyer in Canada looking to make a smart move toward homeownership? Did you know that you can utilize your Registered Retirement Savings Plan (RRSP) to assist with your down payment through the Home Buyers’ Plan (HBP)? This strategic financial maneuver can offer you a pathway to homeownership while tapping into your retirement savings for your dream home. Let’s discuss further on how to use your RRSP as a downpayment.

Understanding the RRSP Down Payment Advantage

The RRSP Down Payment strategy, facilitated by the Home Buyers’ Plan (HBP), is designed to aid first-time homebuyers in purchasing their primary residence. By leveraging the funds invested in your RRSP, you can access a portion of these savings to put towards your down payment, making homeownership more accessible and financially feasible.

Eligibility and Guidelines

To qualify for the HBP, certain criteria must be met:

  • First-Time Homebuyer Status: As per HBP guidelines, you are considered a first-time homebuyer if you haven’t owned a home and resided in it as your principal residence within the past four years.
  • RRSP Contribution: Ensure you have made contributions to your RRSP, as these contributions form the basis for the funds you can withdraw.

Steps to Utilize RRSP for Down Payment

  1. Assess Withdrawal Limit: Under the HBP, you can withdraw up to $35,000 from your RRSP (or $70,000 for couples) for a home purchase. Evaluate your RRSP contributions and determine the maximum allowable withdrawal amount.
  2. Initiate HBP Application: Contact your RRSP provider to obtain the Home Buyers’ Plan application form. Complete the form accurately, specifying the intended withdrawal amount and property details.
  3. Purchase Your Home: Once your HBP application is approved, withdraw the specified amount from your RRSP and use it as a down payment on your new home.
  4. Repayment Obligations: Repay the withdrawn amount back into your RRSP within 15 years, beginning from the second year after withdrawal. Make annual repayments, ensuring you meet the minimum repayment requirement each year.

Benefits and Considerations

  • Reduced Financial Strain: Using RRSP funds for your down payment can alleviate some financial strain associated with purchasing a home.
  • Tax Benefits: The HBP withdrawal is not taxed, and the repayments do not provide immediate tax deductions but replenish your retirement savings tax-free.


Leveraging your RRSP through the Home Buyers’ Plan can be a strategic approach for first-time homebuyers to secure a down payment. However, it’s crucial to weigh the impact on your retirement savings and ensure compliance with the repayment schedule to avoid tax implications.

Consulting with a financial advisor or tax professional can provide tailored guidance, helping you navigate the process effectively and make informed decisions regarding your RRSP and home purchase.

With the RRSP down payment strategy, homeownership becomes an achievable goal, leveraging your savings for a brighter future.