Stacking the FHSA and HBP for your Ottawa down payment

Two accounts, one down payment

Most first-time buyers in Ottawa treat the FHSA and the Home Buyers' Plan as a choice. Pick one, move on. That's the wrong frame. They're designed to be used together, and when you stack them properly a couple can assemble up to $200,000 of tax-advantaged down payment money. That's not a typo. Here's how the two accounts actually work in 2026, and the sequencing that gets the most out of both.

The FHSA: open it first, even if it sits empty

The First Home Savings Account is the better of the two tools for most people, so it's where I tell clients to start. You can contribute $8,000 per year up to a $40,000 lifetime cap. The money goes in pre-tax, the same way an RRSP contribution does, and it comes out completely tax-free when you buy a qualifying first home. Growth inside the account is tax-free too. It's the rare account that gives you the RRSP deduction going in and the TFSA exemption coming out.

The detail people miss is the carryforward. Your contribution room only starts accumulating once you open the account, not when you turn 18. So if you think you'll buy in three or four years, open the FHSA now, even with ten dollars in it. Each year you don't max out, up to $8,000 of unused room carries to the next year, to a maximum of one extra year's room. Open it in 2026, contribute nothing, and in 2027 you can put in $16,000.

One more thing the bank won't always flag: FHSA contributions follow the calendar year. There's no 60-day grace window like the RRSP has. A contribution you make in February counts for that year's taxes, not the year before. If you want the deduction on this year's return, the money has to be in by December 31.

The HBP: your own RRSP, on loan to yourself

The Home Buyers' Plan lets you pull up to $60,000 out of your RRSP for a first home without the withdrawal being taxed as income. A couple who both qualify can take $60,000 each, so $120,000 between them. The catch that makes it different from the FHSA is that the HBP is a loan you make to yourself. You repay it back into your RRSP over 15 years, and if you miss a year's repayment that amount gets added to your taxable income.

The repayment math is straightforward. Take the full $60,000 and you're putting roughly $4,000 a year back into your RRSP for 15 years. That's a real obligation, not free money, which is why I'd always fill the FHSA before reaching for the HBP. But for buyers who've been contributing to an RRSP for years and have a real balance sitting there, the HBP turns that retirement money into down payment without a tax hit.

The 2026 repayment change worth knowing

Here's a piece of current news most buyers haven't caught. The federal government's 2026 spring fiscal update extended the temporary HBP repayment relief that was set to expire. For first withdrawals made between January 1, 2026 and December 31, 2028, with a home completion before 2030, your 15-year repayment clock doesn't start ticking for up to five years instead of the usual two. That's three extra years before you owe your first repayment.

For a stretched first-time buyer, that breathing room matters. You're carrying a new mortgage, property tax, and the furnace that always seems to die in the first winter. Pushing the start of your RRSP repayments out a few years frees up cash flow exactly when it's tightest. It doesn't reduce what you owe, it just delays the start. Use the gap to get your footing, not to forget the obligation exists.

What stacking looks like in real Ottawa numbers

Run the math on a couple, both first-time buyers, both with maxed accounts. FHSA: $40,000 each, so $80,000. HBP: $60,000 each, so $120,000. Combined, that's $200,000 of tax-advantaged capital aimed at a single purchase.

On a $700,000 Ottawa home, 20% down is $140,000. Stacked, this couple clears that with room left for closing costs and still hasn't touched their regular savings. On a $1,000,000 home, 20% is $200,000, and the stack covers the entire down payment on its own. Even buyers nowhere near maxed benefit. A couple with $30,000 in FHSAs and $40,000 in RRSPs has $70,000 working for them, which on a townhouse in Findlay Creek or Riverside South is most or all of the down payment.

Remember Ontario's first-time buyer land transfer tax rebate stacks on top of all of this, knocking up to $4,000 off your closing costs. And Ottawa has no municipal land transfer tax, so unlike a Toronto buyer you're only paying the provincial side once.

The sequencing mistakes I see

Three errors come up over and over. First, people wait to open the FHSA until they're ready to buy, and lose years of contribution room they can never get back. Open it early. Second, they drain the HBP before filling the FHSA, taking on a 15-year repayment obligation they didn't need because the FHSA money never has to be paid back. Fill the tax-free account first. Third, they forget the FHSA December 31 deadline and miss a year's deduction by contributing in the new year out of habit from how RRSPs work.

The rates backdrop doesn't change any of this. The Bank of Canada held its overnight rate at 2.25% on June 10, its fifth straight hold, with the next decision July 15. Whether rates drift down a quarter point this summer or hold, a bigger down payment means a smaller mortgage and an easier stress test. The accounts do that work regardless of where rates land.

If you want to map your specific FHSA and RRSP balances against a real Ottawa price range, and figure out the order to draw them down, that's a conversation I have most weeks. Call or text me at 613-262-6545, or email fil@613realtor.ca, and we'll run your actual numbers.