May 20, 2026
Building Your Down Payment Without Touching Retirement Savings
RRSP Home Buyers' Plan, FHSA, gifted funds, and other Canadian-specific levers.
Saving 5%–20% on a first home in Ottawa is a serious undertaking, but Canada gives first-time buyers several levers most people don't fully use.
The First Home Savings Account (FHSA) is the most powerful new tool. You can contribute up to $8,000 per year, with a $40,000 lifetime cap. Contributions are tax-deductible like an RRSP, and withdrawals for a qualifying first home are tax-free like a TFSA. Open the account even if you can only put in $1,000 — opening it starts your contribution room, which carries forward.
The RRSP Home Buyers' Plan (HBP) lets you withdraw up to $60,000 (each spouse can withdraw, so a couple gets up to $120,000) from your RRSP, tax-free, to use as a down payment. You repay it over 15 years starting the second year after withdrawal. The catch: funds must have been in the RRSP for at least 90 days before withdrawal. Plan ahead — contributing to your RRSP in February to withdraw under HBP in May works; contributing the day before doesn't.
Gifted funds from immediate family are common in Ottawa and fully accepted by every major lender, but they require a gift letter signed by the giver confirming the money is not a loan, plus a 90-day paper trail showing the funds in your account before closing. If a parent transfers $30,000 to you a week before closing with no documentation, your file can be flagged.
The First-Time Home Buyer Incentive (federal shared-equity program) was wound down in 2024 and is no longer available. Don't rely on outdated blog posts that still reference it. The Ontario land transfer tax rebate, however, is alive and well — first-time buyers get back up to $4,000 on the provincial LTT, which on most Ottawa homes wipes out the LTT bill entirely.
Mix and match. A typical Ottawa first-time buyer couple now maxes the FHSA over 3–5 years, layers in HBP withdrawals, and uses a modest family gift to clear the 20% threshold and avoid CMHC insurance — or the 5%–10% threshold to get into the market sooner with insurance.
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