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Can I Use My RRSP For A Downpayment?

by | Aug 10, 2023 | RRSP

Can I Use My RRSP For A Down Payment

If you’re a Canadian aiming to make the jump from renting to owning your own property, you might wonder, “Can I use my RRSP for a downpayment?”

The answer is yes, thanks to the Home Buyers’ Plan (HBP) – a financial avenue designed to assist first-time homebuyers in making their dreams of homeownership a reality.

In this comprehensive guide, we’ll delve into the details of the HBP and how it can pave the way to your dream first home.

Understanding HBP & RRSP

The Registered Retirement Savings Plan (RRSP) is a potent tool designed to aid Canadians in building a nest egg for their retirement years.

Beyond its traditional purpose, the RRSP unveils another facet – one that can pave the way to homeownership through the RRSP Home Buyers’ Plan.

This plan presents a unique opportunity for first-time homebuyers to tap into their RRSP for a down payment without incurring taxes on the withdrawal.

Whether you’re buying a home for yourself or for a related person with a disability, the HBP offers a unique opportunity to use your retirement savings towards your housing aspirations.

How To Use Your RRSP For A Downpayment?

Eligibility Criteria to Qualify for the HBP

For you to be eligible for the Home Buyers’ Plan (HBP), several criteria need to be met –

  • You must qualify as a first-time home buyer, which generally means you haven’t owned a property in the past.
  • You should have a written agreement to buy or build a qualifying home for yourself or a related person with a disability.
  • You need to be a Canadian resident at the time of RRSP fund withdrawal under the HBP, continuing until the home’s purchase or construction.
  • Your intention should be to occupy the qualifying home as your primary residence within a year of acquiring or constructing it.

RRSP Withdrawal

Under the HBP, you can withdraw up to $35,000 from your RRSP to use as a downpayment. If you’re buying a home with a partner who also qualifies, you could potentially pull together $70,000 – a significant financial boost towards your new home.

It’s worth noting that the funds should have been in your account for at least 90 days before you can make a withdrawal.

Multi-RRSP Strategy

Leveraging the HBP allows you to draw funds from various individually owned RRSPs. This strategic approach tailors your financial resources to align with your home acquisition objectives.

Repayment Flexibility

The withdrawn funds from your RRSP must be repaid over a 15-year period. The process of paying back begins in the second year after withdrawal. You must repay at least 1/15 of the total amount withdrawn each year. The best part? These repayments are not taxed.

Pros And Cons Of Using RRSP As A Down Payment


  • HBP speeds up your path to owning your dream home.
  • Utilize your tax refund and make tax-free withdrawals.
  • HBP allows you to access your funds without penalty if repayments are met.
  • RRSP investments continue to grow while you secure your home.


  • Tax implications upon withdrawal
  • Market volatility risks
  • Potential loss of compound growth

It’s advisable to consult an Edmonton mortgage broker or a financial advisor before proceeding.

How To Withdraw From Your RRSP Account?

To start, fill out the appropriate forms from your financial institution and submit them to the Canada Revenue Agency (CRA).

How To Use RRSP For Down Payments?

  1. Check your RRSP contribution room.
  2. Contact your financial institution and provide the required documents.
  3. Withdraw the funds.
  4. Complete your home purchase.
  5. Start repaying the withdrawn amount.

The repayment process involves contributing to your RRSP, and the CRA will provide you with the necessary details on your annual notice of assessment.

FAQs On Buying A House Using An RRSP

Can the Home Buyers’ Plan (HBP) be used more than once?

Yes, if you’ve used HBP before, you can use it again. However, to qualify, you must have no remaining HBP balance on January 1st of the withdrawal year and meet all eligibility criteria. This lets you use the HBP multiple times to aid in your home-buying goals.

Can I employ my Tax-Free Savings Account (TFSA) for a home purchase?

Although the HBP is RRSP-centric, alternative avenues such as the Tax-Free Savings Account (TFSA) can be explored for this purpose.

Should RRSPs Be Used By Home Buyers?

Should You Use RRSP For Home Buying

As you stand at the crossroads of your homebuying journey, the question of whether to use your RRSP for a down payment echoes in your mind.

While the allure of unlocking your retirement savings for a significant life step is undeniable, the decision warrants careful consideration. The answer lies within your unique circumstances and long-term financial goals.

Before making your decision, it’s advisable to engage with a financial advisor who can provide tailored guidance based on your unique situation as a first-time home buyer in Edmonton.

Remember, your journey to homeownership is a deeply personal one, and the path you choose should resonate with your values and aspirations.

Ready to embark on your journey to homeownership?

With an intimate understanding of the real estate market and personal finance, we have guided countless individuals through the process of leveraging their RRSP for a down payment.

At Sandra Forscutt, our expert services are tailored to your needs, ensuring you secure the best financial solutions for your dream home.

Contact us today to take that exciting first step!

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