How to Use Your RRSP as a First Time Home Buyer in 2026 (HBP Guide for Ontario)
Using Your RRSP to Buy Your First Home: What You Need to Know
Yes, you can use your RRSP to buy your first home through the CRA's Home Buyers' Plan (HBP), which allows a tax-free withdrawal of up to $35,000 per person - or $70,000 combined if two qualifying buyers are purchasing together. That's a significant chunk of change, and in Ontario's housing market, you'll want every dollar working for you.
What makes the HBP particularly valuable is that your withdrawal is not added to your taxable income in the year you take it. That's one of the most tax-efficient ways to boost a down payment available to Ontario buyers right now. With the average resale home price in the GTA exceeding $1.1 million in 2025, a larger down payment directly reduces the mortgage default insurance costs you'd otherwise face on anything below 20% down.
There are two key conditions to keep in mind before you initiate a withdrawal. First, any RRSP funds you plan to pull out must have been sitting in your RRSP account for at least 90 days before the withdrawal date. Second, you must meet the CRA's first-time buyer definition (more on that below). Getting the timing right matters, and it's something a mortgage broker can help you coordinate alongside your mortgage closing date so nothing slips through.
If you're just beginning to piece together your home buying strategy, our guide on first-time home buyer mortgage advice in Ontario is a good place to build your foundation alongside this HBP walkthrough. TD's HBP overview also provides a solid summary of how the plan works from a financial institution's perspective.
Eligibility Rules: Who Qualifies to Use the RRSP Home Buyers' Plan
The CRA defines a first-time home buyer as someone who has not owned and occupied a qualifying home as their principal place of residence at any point during the four calendar years before the year of withdrawal. So if you last owned a home in 2021 and you're withdrawing in 2026, you don't qualify yet. If your last ownership was in 2021 and you're withdrawing in 2026, that's a five-year gap and you're in the clear - but the math matters, so check carefully against the CRA's HBP eligibility page.
Beyond the ownership look-back, a few other rules apply:
The 90-day seasoning rule. Any RRSP funds you intend to withdraw under the HBP must have been on deposit in your RRSP account for at least 90 consecutive days before the withdrawal date. Contributions made within that 90-day window are simply ineligible, full stop. This is worth confirming directly with your RRSP issuer before you start counting on those funds. Community discussions on Reddit's PersonalFinanceCanada regularly surface confusion about this point, so it's worth being clear: standard RRSP contributions do count toward the HBP as long as the 90-day rule is satisfied.
Written agreement requirement. You must have a signed agreement to buy or build a qualifying home before you withdraw, and you must intend to occupy that home as your principal residence within one year of buying or building it.
Residency. You must be a Canadian resident at the time of the withdrawal. Non-residents are not eligible to participate in the HBP.
Repeat participation. If you've used the HBP before, you can participate again - but only if your previous HBP balance was fully repaid before January 1 of the year in which you want to make a new withdrawal, and you meet the first-time buyer definition again. TD's breakdown of HBP qualifications covers this scenario clearly.
Divorced or separated individuals may qualify as first-time buyers again even if they previously owned a home with a spouse, as long as they satisfy the four-year look-back rule on their own.
Self-employed buyers face the same HBP eligibility criteria as any other buyer, but they encounter additional scrutiny during the mortgage qualification process itself. Lenders will typically examine two years of filed tax returns and may use net income rather than gross revenue when calculating borrowing capacity. If that applies to you, our article on how to qualify for a mortgage when you're self-employed in Ontario walks through what to expect.
Step-by-Step: How to Withdraw RRSP Funds Under the Home Buyers' Plan
To use the RRSP Home Buyers' Plan, you complete CRA Form T1036, submit it to your RRSP issuer, and withdraw up to $35,000 per person - and no tax is withheld at source. Here's exactly how that process works:
Step 1 - Confirm your eligibility. Before anything else, verify that you meet the first-time buyer definition, that your intended RRSP funds have been on deposit for at least 90 days, and that you have a signed Agreement of Purchase and Sale or a building contract in hand. Don't initiate the withdrawal without all three boxes checked. The CRA's HBP page lists all conditions in plain language.
Step 2 - Calculate how much to withdraw. You can withdraw up to $35,000 from your own RRSP. If you're buying with a partner who also qualifies as a first-time buyer, you can each withdraw up to $35,000 for a combined total of $70,000 applied to the same home purchase. You don't have to take the maximum - withdraw what you need.
Step 3 - Complete CRA Form T1036. Download the Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP (Form T1036) from the CRA website. You fill out Area 1 yourself, then hand Area 2 to your RRSP issuer (your bank or financial institution) to process the withdrawal. Keep a copy for your records.
Step 4 - Submit Form T1036 to your RRSP issuer. Your financial institution processes the withdrawal without withholding any tax. This is one of the things that sets HBP withdrawals apart from regular RRSP withdrawals, where withholding tax applies immediately. TD's HBP guide explains what to expect from your issuer during this step.
Step 5 - Coordinate timing with your mortgage closing date. Withdraw funds close enough to your closing date that the money is available when your lawyer needs it, but not so far in advance that it sits idle for months. Most Ontario real estate lawyers need certified funds at least two to three business days before closing, so plan backward from there. Your mortgage broker can advise on the ideal withdrawal window given your lender's specific requirements.
Step 6 - Confirm funds are in your account and applied to your down payment. Don't assume the transfer happened - confirm it. Your lawyer will need those funds in certified form, and any last-minute scramble can delay your closing.
Step 7 - Track your HBP balance and set up repayments. Starting in the second year after your withdrawal year, you must begin repaying your HBP balance to your RRSP over a maximum of 15 years. The minimum annual repayment is 1/15th of the total amount withdrawn. If you withdrew $30,000, that's $2,000 per year. If you miss a year's repayment, that missed amount gets added to your taxable income for that year - so it's worth setting up automatic contributions to stay on track.
One thing to be aware of: if your HBP repayment is already active when you apply for your mortgage, Ontario lenders will factor that annual repayment obligation into your debt service ratios. This is one more reason that timing your withdrawal and mortgage application carefully makes a real difference in how much you can borrow. Discussions on this topic among Canadian investors at Reddit's PersonalFinanceCanada are worth reading if you want a range of real-world perspectives.
Practical Tips to Get More Out of Your RRSP as a First-Time Buyer (And Mistakes to Avoid)
The HBP is a strong tool, but how you use it determines how much value you actually get. Here are the strategies that matter most for Ontario buyers in 2026.
Don't contribute and immediately withdraw. The 90-day seasoning rule catches people more often than you'd expect. Contributing to your RRSP and then trying to withdraw those same funds for the HBP within 90 days means those contributions are simply ineligible. Plan ahead, and confirm the deposit dates with your RRSP issuer before counting on specific funds. The CRA's HBP guidance makes this requirement explicit.
Use the RRSP refund strategy to amplify your down payment. Contributing to your RRSP before the February deadline generates a tax refund that you can put toward your down payment - separate from the HBP withdrawal itself. A $10,000 RRSP contribution produces a refund of roughly $2,650 to $4,341 in Ontario depending on your marginal tax bracket, with those in the 43.41% combined federal-provincial bracket (around the $100,000 income level) recouping the most. That refund arrives before closing if you file promptly, giving you an additional cash boost alongside your RRSP withdrawal.
Stack the HBP with the First Home Savings Account (FHSA). The FHSA allows up to $8,000 per year in tax-deductible contributions, with a lifetime maximum of $40,000 and tax-free withdrawals for a qualifying home purchase. Unlike the HBP, there's no repayment obligation. You can combine the HBP ($35,000) and the FHSA ($40,000) on the same home purchase, giving each qualifying buyer up to $75,000 in tax-advantaged down payment funds. For a couple where both partners qualify, that's potentially $150,000 combined before touching any other savings.
Know the First-Time Home Buyers' Tax Credit. Separate from both the HBP and FHSA, Ontario buyers can claim a $10,000 non-refundable federal tax credit in the year of purchase, which translates to up to $1,500 in actual tax savings. It doesn't require a separate application - you claim it on your annual tax return.
Be careful with RRSP loans. Taking out a loan to make an RRSP contribution specifically to maximize your HBP amount is a strategy some buyers consider. The math works only if the resulting tax refund exceeds the loan interest cost before you repay the loan, and the 90-day seasoning rule still applies in full. The REIN community has discussed this approach in depth - it's worth reviewing those discussions before going this route.
Work with a mortgage broker, not just one bank. Different lenders handle HBP repayment obligations differently when they calculate your debt service ratios. Working with a broker rather than a single bank gives you access to a wider range of lenders - including banks, credit unions, monolines, and private lenders - each with their own underwriting approach. That flexibility can meaningfully affect how much mortgage you qualify for. Our breakdown of mortgage broker vs. bank options in Ontario explains why that matters in practical terms.
In the GTA and across Southern Ontario, where average home prices in many markets remain above $900,000 as of 2026, hitting the 20% down payment threshold is the difference between paying CMHC insurance premiums and avoiding them entirely. Community discussions among Ontario buyers consistently highlight how much those premiums add to the total cost of borrowing. Stacking your HBP, FHSA, RRSP refund, and First-Time Home Buyers' Tax Credit is how you close that gap faster.
Frequently Asked Questions: RRSP and the First Time Home Buyer Plan
Can you use RRSP for first time home?
Yes. First-time home buyers in Canada can withdraw up to $35,000 from their RRSP tax-free under the Home Buyers' Plan (HBP). If you're purchasing with a partner who also qualifies, you can each withdraw $35,000 for a combined total of $70,000. The withdrawal is not added to your taxable income in the year you take it, but you must repay the amount to your RRSP over 15 years starting the second year after the withdrawal, or the missed repayments are taxed as income.
What is the 3 year rule for RRSP?
There is no 3-year RRSP rule for the Home Buyers' Plan. The actual requirement is the 90-day seasoning rule: any RRSP funds you plan to withdraw must have been on deposit in your RRSP account for at least 90 days before the withdrawal date. Contributions made within that 90-day window are not eligible for the HBP. Separately, the first-time buyer definition looks back four calendar years - you must not have owned and lived in a principal residence during that period. The CRA's HBP page and TD's first-time buyer overview both clarify this distinction.
How much will I get back if I put $10,000 in RRSP?
The tax refund on a $10,000 RRSP contribution in Ontario depends on your marginal tax rate. At the lowest combined federal and Ontario rate (approximately 20.05%), you'd receive roughly $2,005 back. At the mid-range rate of around 43.41% (income near $100,000), you'd receive approximately $4,341. At the top combined rate of roughly 53.53%, the refund approaches $5,353. Contributing to your RRSP before the February deadline, collecting the refund, and using both amounts toward your down payment is a well-established strategy for Ontario first-time buyers.
What is the $10,000 tax credit for first time home buyers in Canada?
The First-Time Home Buyers' Tax Credit (HBTC) is a $10,000 non-refundable federal income tax credit that qualifying buyers can claim in the year they purchase their first home. At the lowest federal tax rate of 15%, that $10,000 credit translates to up to $1,500 in actual tax savings on your return. You qualify if you haven't owned a principal residence in the year of purchase or in any of the preceding four calendar years. This credit is completely separate from the Home Buyers' Plan and can be claimed alongside it.