HBP, FHSA, and RRSP Hacks to Boost Your Down Payment

Buying a home is one of the biggest financial milestones you'll ever hit, but let’s be honest—the down payment is often the biggest hurdle.

What if I told you there are government-approved strategies that could supercharge your savings, shrink your tax bill, and give you a much bigger down payment—all without breaking a sweat?

This isn’t just about setting aside money and hoping for the best. It’s about using smart financial hacks that let you grow your savings faster, leverage tax refunds, and legally pull more money into your down payment—without penalties.

In this guide, we’ll cover:

• How to maximize your RRSP for the First-Time Home Buyer’s Plan (HBP)
• How the FHSA (First Home Savings Account) can accelerate your savings
• Investment hacks that turn your existing savings into a much bigger down payment

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How to Maximize Your RRSP for the First-Time Home Buyer’s Plan (HBP)

What is the HBP?

The Home Buyers' Plan (HBP) allows first-time home buyers to withdraw up to $35,000 per person (or $70,000 per couple) from their RRSPs tax-free to use as a down payment. The only catch? You must repay the amount over 15 years, or it gets added back to your taxable income.

This is one of the best-kept secrets for first-time homebuyers, and if used strategically, it can massively boost your down payment.

The Smart Hack: Using an RRSP Contribution to Trigger a Huge Tax Refund

Here’s how savvy buyers hack the system to create more down payment funds:

1. Make an RRSP contribution before buying a home.

• If you have savings sitting in a regular bank account, don’t just use that for your down payment—invest it in an RRSP first.
• This reduces your taxable income, triggering a tax refund.

2. Wait at least 90 days before withdrawing.

• RRSP contributions must be invested for a minimum of 90 days before they can be withdrawn under the HBP.

3. Withdraw under the HBP and use the tax refund to boost your down payment.

• When tax season rolls around, you get a massive refund from your RRSP contribution.
• That refund can be added to your down payment, instantly increasing the amount of money you can put toward your home.

Example: The Power of This Strategy

Let’s say Sarah earns $80,000 per year. She contributes $20,000 to her RRSP before buying her first home.

• This lowers her taxable income to $60,000, resulting in a $7,000 tax refund.
• After 90 days, she withdraws the $20,000 under the HBP for her down payment.
• She now has $27,000 instead of $20,000 for her home purchase.

Boom—free money just by using the system correctly!

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Using the FHSA (First Home Savings Account) to Supercharge Your Down Payment

What is the FHSA?

The First Home Savings Account (FHSA) is a new program designed to help first-time buyers save for a home faster. It combines the best benefits of RRSPs and TFSAs:

✅ Tax-deductible contributions (like an RRSP)
✅ Tax-free withdrawals for your first home (like a TFSA)
✅ Tax-free investment growth

This means you can:

• Reduce your taxable income when you contribute.
• Earn tax-free investment returns while you save.
• Withdraw all of it tax-free when buying your first home.

Maximizing the FHSA for a Bigger Down Payment

1. Contribute the annual max ($8,000 per year, up to a $40,000 lifetime limit).
2. Invest it in growth assets (stocks, ETFs, or mutual funds) to maximize gains.
3. Combine with the RRSP HBP for a double tax-advantaged strategy.

Example: How the FHSA Gives You a Bigger Down Payment

Let’s say Mark contributes $8,000 per year for 5 years into his FHSA.

• His total contributions: $40,000
• His investment growth: $10,000 (assuming a modest 5% annual return)
• Total amount available for down payment: $50,000, all tax-free

Now, combine that with an RRSP-HBP strategy and he could be looking at $85,000+ in available down payment funds.

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Smart Investment Strategies to Grow Your Savings Before Buying

Instead of just saving cash for a down payment, why not grow your money while you wait?

1. Invest in an FHSA or RRSP Instead of a Regular Savings Account

• Keeping savings in a regular account earns you almost nothing.
• FHSA and RRSP investments can be placed in stocks, ETFs, or mutual funds, growing your down payment while keeping tax benefits.

2. Use a High-Interest Savings Account or GIC for Short-Term Savings

• If you’re buying within 1-2 years, a GIC or high-interest account keeps your money safe while still earning more than a checking account.

3. Open a TFSA for Extra Tax-Free Growth

• If you max out your FHSA, put additional funds in a TFSA, where investments also grow tax-free.
• This can be a secondary home-buying fund or an emergency fund after purchase.

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Combining These Strategies for Maximum Impact

If you really want to optimize your down payment, here’s the ultimate game plan:

1. Max out your FHSA first (up to $8,000 per year, $40,000 total).
2. Contribute to your RRSP to trigger a tax refund.
3. Use the RRSP HBP to withdraw up to $35,000 tax-free ($70,000 per couple).
4. Invest wisely to grow your savings while you wait.

Real-Life Scenario: How a Couple Turns $50,000 into $150,000

Mike and Lisa want to buy a home in 3 years. They currently have $50,000 saved. Instead of just sitting on the cash, they:

• Max out their FHSA ($8,000 per year each)
• Invest in their RRSP to get a $14,000 tax refund (which they also invest)
• Grow their savings through smart investments

Three years later, they have:

• $40,000 from FHSA contributions
• $20,000 from investment growth
• $70,000 withdrawn tax-free from their RRSP

Total down payment = $150,000 instead of $50,000.

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Final Thoughts: Use Every Tool Available to Boost Your Down Payment

Most first-time buyers don’t take full advantage of these programs—which means they either pay too much in taxes or end up with a smaller down payment than they could have had.

Key Takeaways:

✔️ Leverage your RRSP to trigger a big tax refund, then withdraw using the HBP.
✔️ Max out your FHSA to grow savings tax-free and shrink your tax bill.
✔️ Invest instead of just saving to make your money work harder.

If you’re serious about buying a home, why not use every tool available to make it easier?

At The Mortgage Experts, we help first-time buyers navigate these strategies to build the biggest down payment possible while saving thousands in taxes.

Want a custom game plan for your down payment? Let’s talk!