While the HBP is also a tool designed to help with the down payment for your first home, the funds (maximum of $35,000) come from your RRSP and must be paid back within 15 years. If you miss paying back your HBP, those missed payments are added to your
income and you forfeit the accompanying contribution room in your RRSP. The amount you repay to your RRSP will eventually be taxed once you withdraw them, either through the RRSP or a RRIF, whereas the withdrawals from the FHSA are completely tax‑free.
You can also choose to withdraw funds from both your FHSA and your RRSP through the Home Buyers’ Plan. This could be a great way to increase the amount of your down payment on your first home purchase. If you and your spouse both qualify as first-time home buyers, you can both withdraw from your FHSA and your RRSPs through the Home Buyers’ Plan, if you choose. Chat with an advisor who can go over the benefits with you.