FHSA, RRSP or TFSA: Where Should Your Down Payment Savings Live?

Buyer Advice Dave Dubbin July 14, 2026

If you are saving for a first home in Toronto, the accounts you use matter almost as much as the amount you save. Used well, the FHSA, the RRSP Home Buyers' Plan, and the TFSA can each hand you thousands of dollars in tax savings on the way to your down payment, and they stack. Here is how each works and how buyers actually use them. One note before we start: we are realtors, not financial advisors, so treat this as a map, and bring your accountant or advisor along for the route.

Wondering what that down payment needs to add up to? Get in touch and we will run the numbers for your price range.

The FHSA: built for exactly this

The First Home Savings Account is the newest tool and, for most first time buyers, the best one. You can contribute up to $8,000 a year to a lifetime maximum of $40,000. Contributions are tax deductible like an RRSP, and withdrawals for a qualifying first home are tax free like a TFSA. Both ends of the deal, in your favour.

The money grows tax free while it sits there, and there is nothing to repay after you buy. If you are buying with a partner and you each open one, that is up to $80,000 of combined room for the same purchase. If you are eligible and saving for a home, it is hard to find a reason not to open one, if only to start the clock on your contribution room.

The RRSP Home Buyers' Plan: borrow from your future self

The Home Buyers' Plan lets a first time buyer withdraw up to $60,000 from an RRSP for a home purchase without paying tax on the withdrawal. A couple can pull up to $120,000. The catch is in the name of this section: it is a loan from your own retirement savings, and you repay it into your RRSP over 15 years, starting the second year after you withdraw. Miss a year's repayment and that amount gets added to your taxable income.

The HBP shines if you already have a healthy RRSP balance, and it works alongside the FHSA. Using both on the same purchase is allowed, and for buyers who have been saving a while, the combination can cover a serious share of an Etobicoke down payment.

Saving is step one. These posts cover what comes next.

The TFSA: the flexible one

The Tax Free Savings Account is the utility player. No tax deduction going in, but everything it earns and everything you take out is tax free, with no repayment schedule and no rules about what the money is for. If your plans change, a TFSA does not care, which is exactly its charm.

For home buyers, the TFSA usually becomes the overflow account: max the FHSA first for the deduction, then keep stacking savings in the TFSA, where the money stays accessible for the deposit that needs to move on 24 hours' notice.

What about a plain old savings account?

Once your buying timeline gets short, boring becomes beautiful. Money you will need within a year or two does not belong in anything that can drop 15 percent the month before closing. High interest savings accounts and short GICs inside those registered accounts keep the money safe and earning something. Just watch GIC maturity dates against your likely offer dates, because a locked GIC and a 24 hour deposit deadline are a bad combination. Fast access is the whole game.

The order most buyers follow

Every situation is different, but the pattern we see from buyers who arrive at offer night in good shape looks like this: open the FHSA early and feed it up to the $8,000 a year, use the RRSP and Home Buyers' Plan if there is already money sitting there, top up the TFSA with whatever else you can, and shift everything toward safe, liquid places as the buying date gets close. Then talk to a mortgage professional early, because pre approval tells you what all this saving actually buys.

When the savings side is sorted, the fun part starts, and that is where we come in. We help Etobicoke buyers figure out what their number gets them, neighbourhood by neighbourhood, and we are happy to have that conversation long before you are ready to offer.