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The Home Buyer’s Plan: What You Need to Know

Are you a hopeful first-time homebuyer in Canada who is unsure how you will afford a mortgage of your own? You’re not alone. We understand that considering such a large purchase is stressful and can feel very overwhelming.

However, you might be comforted to know that you may be eligible to borrow up to $25,000 from your RRSP, tax-free. You also might feel better knowing there are mortgage advisors, such as the team at The Mortgage Station, who are committed to simplifying the complex, and helping you to understand your mortgage and borrowing options fully.

What is The Home Buyers’ Plan?

The Home Buyers’ Plan is designed for first time home buyers, or those that have, or are, assisting persons with a disability; to help cover expenses such as:

  • Down payment
  • Closing costs
  • Property improvements, etc.

Borrowing From Your RRSP

If you meet the specific requirements of borrowing from your RRSP to purchase a home under the Home Buyers’ Plan, you can qualify to borrow up to $25,000 for your down payment. If you and your partner both meet the requirements, you can both withdraw $25,000 each.


  1. You haven’t owned a home in the last four years.
  2. You have to sign an agreement stating you will buy and live in the property (within a year)
  3. If you’ve benefited from the HBP before, you cannot have an outstanding balance.
  4. You have to make your RRSP withdrawal within 30 days of possession of the home.
  5. Your funds must be in your RRSP account for more than 90 days before your withdrawal.

Repayment of Your RRSP

You will need to repay this loan over a maximum of a 15-year period, beginning with a payment made two years from the point of purchase. The CRA will send you a yearly statement of account.


2017 – Purchase Home, borrow $20,000
2018 – No payment required
2019 – First payment required, $20,000 / 15 years = $1,333.33 minimum payment

If the minimum payment is not re-paid each year, you will need to claim the difference as taxable income. If you pay more than the minimum, your minimum will change each year moving forward – as you have less to repay.

To withdraw money from your RRSP, you must fill out a T1036 form. You will need to fill this form out each time you plan to make a withdrawal. Visit for more details.

Ready to Get Started?

Begin your homebuyers’ journey with a call to The Mortgage Station to discuss mortgage pre-approval and if borrowing from your RRSP makes sense for you. Learn more about which steps to take in this video by Verico, or contact us today:

For more information, check out our article, ‘What Is An RRSP Mortgage Loan?’.

by | Dec 31, 2018 | Uncategorized