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FHSA Calculator: Compare FHSA vs RRSP+HBP vs TFSA

First Home Savings Account (FHSA) combines RRSP's tax deduction with TFSA's tax-free withdrawals. Compare all three strategies to find the optimal way to save for your down payment.

FHSA: The Best of Both Worlds

The First Home Savings Account combines RRSP's tax deduction with TFSA's tax-free withdrawals. Contribute up to $8,000/year ($16,000 for couples), get immediate tax refunds, and withdraw 100% tax-free for your first home—with NO repayment required. For most first-time buyers, max out your FHSA before considering HBP or TFSA.

Step 1: Your Situation

Buying with a spouse/partner?

Couples can combine: $16,000/year FHSA + $120,000 HBP

Step 2: Income & Tax Rates

Tax rates matter! FHSA and RRSP+HBP give you tax deductions at your current rate, while HBP withdrawals are taxed at your future rate. Higher current tax rate = bigger benefit.

Your Tax Situation

$
20%
30%
40%
50%

Includes provincial tax. ~30% for $75k income in Ontario.

15%
25%
35%

Step 3: Your Savings Plan

IMPORTANT: Enter your after-tax savings capacity. The calculator will show how RRSP/FHSA tax refunds let you contribute MORE than TFSA with the same after-tax cost.

$
$
4%
6%
8%

Conservative: 4-5%, Moderate: 6%, Aggressive: 7-8%

Step 4: Your Goal

$
$

Strategy Comparison

FHSA Strategy

Contributions:Tax Deductible
Withdrawals:Tax Free

Down Payment Available

$52K

Total Contributed:$45K
Tax Refunds:$12K
Investment Growth:$7K
No Repayment Required

RRSP+HBP Strategy

Contributions:Tax Deductible
Withdrawals:Must Repay (15 years)

Down Payment Available

$60K

Total Contributed:$76K
Tax Refunds:$21K
Investment Growth:$11K
Must Repay: $4K/year × 15 years

Opportunity cost: $244K

TFSA Strategy

Contributions:After-Tax (No Deduction)
Withdrawals:Tax Free

Down Payment Available

$63K

Total Contributed:$55K
Tax Refunds:$0 (No Tax Benefit)
Investment Growth:$8K
No Repayment Required

But no tax deduction either

Account Growth Over Time

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Key Insight: FHSA and RRSP+HBP grow faster because tax refunds let you invest more with the same after-tax cost. TFSA grows slower but has no repayment obligation.

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How the FHSA Works vs RRSP+HBP vs TFSA

1
FHSA Contribution Limits
You can contribute up to $8,000 per year to your FHSA, with a lifetime maximum of $40,000. Unused contribution room carries forward (up to $8,000 per year). Couples can each have their own FHSA ($16,000/year combined).
Annual Limit: $8,000 | Lifetime Limit: $40,000 | Carryforward: $8,000 max/year
2
FHSA Tax Treatment
FHSA contributions are tax-deductible (like RRSP), giving you an immediate tax refund. The account grows tax-free. Qualifying withdrawals for your first home are completely tax-free (like TFSA). This is the 'best of both worlds'!
Tax Refund = Contribution × Marginal Tax Rate | Withdrawal Tax = $0
3
HBP Comparison
Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP (per person, $120,000 for couples) tax-free. BUT you must repay it over 15 years. Missed repayments are added to your taxable income.
HBP Limit: $60,000/person | Annual Repayment: Withdrawal ÷ 15 years
4
TFSA Comparison
TFSA contributions are made with AFTER-TAX dollars (no tax deduction). Growth and withdrawals are tax-free. No repayment required. Generally inferior for home buying because you miss the tax deduction.
TFSA: No Tax Deduction | Growth & Withdrawal: Tax-Free
5
The Critical Difference: After-Tax vs Pre-Tax
This is KEY! If you have $10,000 after-tax to invest: TFSA gets $10,000. FHSA/RRSP at 40% tax rate = $10,000 ÷ (1 - 0.40) = $16,667 contributed because you get $6,667 refund. Same after-tax cost, 66% more invested!
RRSP/FHSA Equivalent = After-Tax Amount ÷ (1 - Tax Rate)
6
FHSA Participation Window
You can keep your FHSA open for up to 15 years OR until you turn 71, whichever comes first. If you don't buy a home, you can transfer the funds to your RRSP tax-free (doesn't use RRSP contribution room).
Max Duration: 15 years OR until age 71
7
Eligibility: First-Time Homebuyer Rule
Both FHSA and HBP require you to be a first-time homebuyer: you (and your spouse) must not have owned and lived in a home during the past 4 years plus the current year.
Eligible if: (Today - Last Home Ownership) > 4 years
8
HBP Opportunity Cost
The 15-year repayment means your RRSP grows slower. We calculate this by comparing RRSP value at retirement WITH repayment vs WITHOUT HBP withdrawal. Typical opportunity cost: $20,000-$50,000+ depending on timeline and returns.
Opportunity Cost = RRSP Without HBP at Retirement - RRSP With HBP at Retirement
9
Long-Term Retirement Impact
For FHSA and TFSA strategies, if you don't use the funds for a home, they can stay invested for retirement. FHSA can transfer to RRSP tax-free. We project account value at retirement age to show true lifetime benefit.
Future Value = Present Value × (1 + Return)^Years

Calculation Notes

• FHSA maximum annual contribution: $8,000 (individual) or $16,000 (couple)
• FHSA lifetime maximum: $40,000 per person ($80,000 for couples)
• FHSA carryforward: Unused room carries forward, max $8,000/year added
• HBP maximum withdrawal: $60,000 per person ($120,000 for couples) - increased from $35k in 2024
• HBP repayment: 15 years, minimum 1/15th per year (grace period varies)
• TFSA contributions: AFTER-TAX dollars (no deduction, no refund)
• RRSP/FHSA contributions: PRE-TAX equivalent (get refund, can contribute more)
• FHSA + HBP can be combined: Use both for maximum down payment power
• FHSA unused funds: Transfer to RRSP tax-free if home not purchased
• Best strategy for most: Max out FHSA first ($40k), then consider HBP if need more
• FHSA must be used within 15 years of opening or by age 71
• Tax rates matter: Higher current rate = bigger FHSA/RRSP benefit

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About This Calculator

v1.0
Updated: January 2025

The First Home Savings Account (FHSA) launched in 2023 as Canada's newest registered account. It's specifically designed for first-time homebuyers and combines the best features of both RRSPs and TFSAs. This calculator helps you compare FHSA with the older RRSP Home Buyers' Plan (HBP) and TFSA strategies to determine which approach maximizes your down payment while minimizing long-term costs.

Key Features

  • Three-way comparison: FHSA vs RRSP+HBP vs TFSA strategies
  • Couple scenarios: Coordinate contributions and tax rates for maximum benefit
  • Tax-accurate calculations: Shows how tax refunds let RRSP/FHSA contribute more than TFSA
  • Contribution limit tracking: FHSA $8k/year ($40k lifetime), HBP $60k per person
  • Repayment analysis: HBP requires 15-year repayment, FHSA doesn't
  • Lifetime impact calculator: Shows opportunity cost and retirement implications
  • Timeline visualization: See account growth year-by-year until purchase
  • Smart recommendations: Algorithm determines the optimal strategy for your situation

When to Use This Calculator

  • New First-Time Buyer (2-5 Year Timeline): FHSA is almost always best. Get tax deductions now, withdraw tax-free later, no repayment. Max out $8k/year FHSA before considering alternatives.
  • Couple with Large Down Payment Goal ($100k+): Combine strategies: Max FHSA for both ($16k/year) + use HBP for additional $120k. This calculator shows the optimal mix.
  • High Income Earner (40%+ Tax Bracket): FHSA's tax refunds are even more valuable. At 40% marginal rate, $8k contribution = $3,200 refund = effectively $4,800 after-tax cost for $8k invested.
  • Comparing with Existing RRSP Savings: Should you use HBP on existing RRSP or start fresh with FHSA? This calculator shows the long-term retirement impact of each choice.
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