The Home Buyers Plan lets you borrow $60,000 from yourself, then spend 15 years paying it back
You withdraw the $60,000 from your RRSP on Friday. By Monday morning, you've already lost something you won't get back for 15 years.
Not the money. The contribution room.
What the repayment calendar actually looks like
The Home Buyers' Plan works like this: you take up to $60,000 from your registered account, tax-free, to buy your first home. The Canada Revenue Agency then expects you to repay one-fifteenth of that amount, $4,000 per year, starting two years after the withdrawal. Miss a repayment in any year and the CRA adds that amount to your taxable income.
The repayment period is 15 years. That part is clear in the program rules. What isn't obvious until you do the arithmetic is that every dollar you repay to satisfy the HBP obligation is a dollar that does not generate new contribution room. You're rebuilding what you already had, not adding to it.
Say you maxed out the plan in 2024. Your first mandatory repayment is due by March 2027. That $4,000 payment goes back into your RRSP, satisfies the CRA's schedule, and disappears from your available room. If you earned $80,000 that year, your 18% contribution limit would normally add $14,400 to your room. But because $4,000 of it is spoken for by the HBP, you have $10,400 left for discretionary savings.
That pattern holds for 15 years.
For a contractor in Courtenay whose income climbs as the business matures, that's 15 years where the room you need most, the room that lets you shelter income in high-earning years, is being used to repay a loan you made to yourself when you earned less.
The income timing problem
A 32-year-old electrician pulling $70,000 today might reasonably expect to clear $110,000 by age 40. The value of an RRSP contribution rises with your marginal rate. A dollar contributed at a lower marginal tax rate in 2026 saves you that percentage in tax. The same dollar contributed at 32.79% in 2034, when you're in the next bracket, saves $0.328.
The HBP repayment obligation eats the high-value years. You're required to park $4,000 annually during the stretch when that room would do the most work, and you're doing it to restore access you already had and spent.
If you skip a year's repayment, the CRA treats it as income and taxes it at your current rate. That forces a choice every year for 15 years: repay the HBP, or take the tax hit and preserve the room for voluntary contributions. Most people repay. The certainty of a tax bill beats the theoretical value of flexibility.
What counts as borrowing from yourself
The framing matters. The HBP is often sold as penalty-free access to your own money. Technically true, the CRA charges no interest and no withdrawal tax. But calling it your own money understates what happens to it after you pull it out.
Money inside an RRSP compounds tax-sheltered. A $60,000 balance growing at 6% annually becomes approximately $107,448 in 10 years. Take that $60,000 out, and you zero the compounding for however long it takes to rebuild the balance. Even if you repay on schedule, the opportunity cost of 15 years without that growth is a five-figure sum by the time you retire.
The plan works when the down payment is the binding constraint and rental costs exceed ownership costs by enough to justify the trade. It stops working when the withdrawal amount is set by what's eligible rather than what's necessary. A $40,000 withdrawal on a $400,000 condo in Courtenay leaves $20,000 in the RRSP still compounding. A $60,000 withdrawal on the same property just because you can access it does not leave you better housed. It leaves you with a longer payback and less flexibility during your peak earning years.
What you're giving up to take the maximum $60,000 matters more than whether you're allowed to take it. Buying power today means 15 years of constrained contribution room tomorrow, and whether that trade makes sense depends on your specific numbers.
Before maxing out the HBP, run the numbers with a mortgage broker who works with self-employed buyers regularly. The best withdrawal amount is often less than the maximum.
You withdraw the $60,000 from your RRSP on Friday. By Monday morning, you've already lost something you won't get back for 15 years.
Not the money. The contribution room.
What the repayment calendar actually looks like
The Home Buyers' Plan works like this: you take up to $60,000 from your registered account, tax-free, to buy your first home. The Canada Revenue Agency then expects you to repay one-fifteenth of that amount, $4,000 per year, starting two years after the withdrawal. Miss a repayment in any year and the CRA adds that amount to your taxable income.
The repayment period is 15 years. That part is clear in the program rules. What isn't obvious until you do the arithmetic is that every dollar you repay to satisfy the HBP obligation is a dollar that does not generate new contribution room. You're rebuilding what you already had, not adding to it.
Say you maxed out the plan in 2024. Your first mandatory repayment is due by March 2027. That $4,000 payment goes back into your RRSP, satisfies the CRA's schedule, and disappears from your available room. If you earned $80,000 that year, your 18% contribution limit would normally add $14,400 to your room. But because $4,000 of it is spoken for by the HBP, you have $10,400 left for discretionary savings.
That pattern holds for 15 years.
For a contractor in Courtenay whose income climbs as the business matures, that's 15 years where the room you need most, the room that lets you shelter income in high-earning years, is being used to repay a loan you made to yourself when you earned less.
The income timing problem
A 32-year-old electrician pulling $70,000 today might reasonably expect to clear $110,000 by age 40. The value of an RRSP contribution rises with your marginal rate. A dollar contributed at a lower marginal tax rate in 2026 saves you that percentage in tax. The same dollar contributed at 32.79% in 2034, when you're in the next bracket, saves $0.328.
The HBP repayment obligation eats the high-value years. You're required to park $4,000 annually during the stretch when that room would do the most work, and you're doing it to restore access you already had and spent.
If you skip a year's repayment, the CRA treats it as income and taxes it at your current rate. That forces a choice every year for 15 years: repay the HBP, or take the tax hit and preserve the room for voluntary contributions. Most people repay. The certainty of a tax bill beats the theoretical value of flexibility.
What counts as borrowing from yourself
The framing matters. The HBP is often sold as penalty-free access to your own money. Technically true, the CRA charges no interest and no withdrawal tax. But calling it your own money understates what happens to it after you pull it out.
Money inside an RRSP compounds tax-sheltered. A $60,000 balance growing at 6% annually becomes approximately $107,448 in 10 years. Take that $60,000 out, and you zero the compounding for however long it takes to rebuild the balance. Even if you repay on schedule, the opportunity cost of 15 years without that growth is a five-figure sum by the time you retire.
The plan works when the down payment is the binding constraint and rental costs exceed ownership costs by enough to justify the trade. It stops working when the withdrawal amount is set by what's eligible rather than what's necessary. A $40,000 withdrawal on a $400,000 condo in Courtenay leaves $20,000 in the RRSP still compounding. A $60,000 withdrawal on the same property just because you can access it does not leave you better housed. It leaves you with a longer payback and less flexibility during your peak earning years.
What you're giving up to take the maximum $60,000 matters more than whether you're allowed to take it. Buying power today means 15 years of constrained contribution room tomorrow, and whether that trade makes sense depends on your specific numbers.
Before maxing out the HBP, run the numbers with a mortgage broker who works with self-employed buyers regularly. The best withdrawal amount is often less than the maximum.
Sources
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