FHSA, TFSA or RRSP: Which Comes First for Your BC Down Payment?

Saving a down payment in Metro Vancouver is a long game, so where you save matters almost as much as how much. Three accounts come up in nearly every first-time buyer conversation.

The FHSA (First Home Savings Account)

• Contributions are generally tax-deductible, and qualifying withdrawals for a first home are generally tax-free.
• There are annual and lifetime limits, and the account has a time limit.
• For many first-time buyers it’s the first place to look.

The RRSP Home Buyers’ Plan

• Lets you withdraw from your RRSP for a first home, up to a set limit, and repay it over time.
• Missed repayments are added to your income for that year.
• Works best when you already have RRSP savings.

The TFSA

• Flexible: withdrawals are tax-free and can be used for anything.
• No deduction going in, but no repayment rules coming out.

Why the order matters

Because each account has different tax treatment and rules, the sequence you use them in can change how much you keep. Many buyers can use more than one, including for the same purchase. An accountant can confirm the tax side for your situation.

The mortgage side

Lenders want to see where your down payment came from, usually 90 days of account history. Money moving between accounts is fine; just keep the statements. If family is helping, a gift letter is typically needed.

A BC note

With Metro Vancouver prices, even a few thousand dollars in tax savings can matter. Plan the accounts early, then let me look at the mortgage side once you’ve completed Form 1A.

Your next step

If you’d like this applied to your own numbers, start with the first-home check. It takes a few minutes, then a short Form 1A from me as a licensed broker, and I review your file myself.

Frequently Asked Questions

Can I use the FHSA and RRSP Home Buyers’ Plan together?

Generally yes, for the same qualifying purchase, subject to each program’s rules. Confirm details with CRA or your accountant.

How far back will a lender check my down payment?

Usually about 90 days of statements for each account the funds came from.

Is a gift from family allowed?

Usually yes, with a signed gift letter and proof the funds were deposited.

Sources

• First Home Savings Account, Canada Revenue Agency
• Home Buyers’ Plan, Canada Revenue Agency
• FHSA, TFSA or RRSP (idea source), Breaking Bank

James Park, Mortgage Broker · Verico Paragon MortgagePal Inc. · Licence MB503774. General information only; not advice for your situation. Advice is provided only after a short Form 1A and a full application. Any rate is quoted with its APR, term and date, OAC and subject to change.