Thinking of buying your first home in the next few years? Discover simple ways to build your down payment faster.

If you’ve started thinking about buying your first home, you have most likely also started thinking about the fastest way to save for your down payment. The great news is, there are two options that make it easier to save – and can help you buy your first home faster than you thought.

1. Make an RRSP (Registered Retirement Savings Plan) part of your down payment saving strategy. It’s true – putting aside a small amount every week in an RRSP can help you build your down payment faster. Through the Home Buyers' Plan, you can borrow up to $60,000 from your RRSP to use as a down payment on your first home.
2. The new FHSA (First Home Savings Account) is a registered plan that can help you save for your first home tax-free. You can contribute up to $8,000 annually to a lifetime limit of $40,000 to buy a qualifying home.

How does the Home Buyers' Plan work?

This federal program lets you borrow funds from your Registered Retirement Savings Plan (RRSP) to purchase your first home. Here’s how it works:

• You and your spouse can each withdraw up to $60,000 from your individual RRSPs to put towards a down payment
• You pay no interest on the money you borrow from your RRSP
• Your withdrawal is not taxable as long as you repay the money within a 15-year period. At least 1/15 of your withdrawal will need to be repaid to your RRSP each year, starting within:
  - two years if your first withdrawal was taken on or before December 31, 2021
  - five years if your first withdrawal was taken between January 1, 2022, and December 31, 2025
  Your RBC advisor can help you figure out the easiest repayment strategy.

How does the First Home Savings Account work?

An FHSA is a type of registered plan, which means you can hold investments in it to help you reach your goal of owning a home faster. At RBC, there’s no minimum balance required to open an account and you’ll be able to hold a full range of investment products.

• Contributions are tax-deductible¹ and could lower your tax bill
• Pay no taxes on your investment earnings
• Contribute up to $8,000 annually ($40,000 lifetime limit) to buy a qualifying home^{2, 3}
• Make a tax-free withdrawal at any time to purchase a qualifying home

Can I use both options to save?

You can use both the Home Buyers’ Plan (HBP) and FHSA to purchase a qualifying home. Keep in mind you’ll have to repay any funds through the HBP, but not with an FHSA. Making use of both options can help you reach your goal of homeownership sooner!

Start now and watch your savings grow.

Even a small amount invested regularly in an RRSP (weekly, monthly, etc.), can grow into a large down payment over time. Start with $50 a week or another amount that fits your budget.

$50 a week can grow to $14,761^* in 5 years.

Set it and Forget it

Setting up regular automatic contributions to your RRSP or FHSA every time you get paid is a great way to save. Because it happens automatically you might not even notice it – except when you start to see your savings build! Tools like the RBC RSP-Matic® make setting this up easy, and RBC InvestEase and RBC Direct Investing each offer easy ways to automate your contributions.

Want to learn more?

• Try the RSP-Matic Calculator to see how much you could save by contributing to an RRSP monthly. (tip: Instead of entering your desired retirement age into the calculator, enter the age at which you want to buy your first home).

• Visit our FHSA page to learn how this account makes saving for your home easier and faster

Talk to an RBC advisor about your options today!

^* This example assumes a 5% annual rate of return in a Registered Retirement Savings Plan. Example is strictly for illustrative purposes only and is not intended to be representative of the performance of any actual or future investment available to investors. Actual client returns may differ substantially. Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.

¹ You can make tax-deductible contributions of up to $8,000 annually, up to a lifetime contribution limit of $40,000. If you don’t contribute the full $8,000 in a single year, the balance can be carried over for as long as you have the account and added to a future year’s contribution amount. Up to $8,000 of unused contribution room can be used annually.

² You can make tax-deductible contributions of up to $8,000 annually, up to a lifetime contribution limit of $40,000. If you don’t contribute the full $8,000 in a single year, the balance can be carried over for as long as you have the account and added to a future year’s contribution amount. Up to $8,000 of unused contribution room can be used annually.
A qualifying home is defined as a housing unit in Canada that you partially or fully own. Co-operatives that only provide tenancy would not qualify.

³ A qualifying home is defined as a housing unit in Canada that you partially or fully own. Co-operatives that only provide tenancy would not qualify.