The First Home Savings Account (FHSA) is one of the most useful financial tools available today for Canadians trying to save for their first home, especially younger buyers competing in high-price cities like Toronto, Vancouver, Calgary and Ottawa. Introduced by the federal government, the FHSA combines features of both an RRSP and TFSA to help build a down payment faster and more efficiently.
For first-time buyers, this program matters. In cities like Toronto, entry-level freehold homes often require six-figure down payments, and many buyers need 2–5 years of saving to make the numbers work. The FHSA softens the gap between incomes, inflation, interest rates, and modern home prices.
Grand Design Build frequently works with buyers who have secured a first property and are now weighing renovation, additions, and interior upgrades. For many of them, leveraging the FHSA is step one before any design or construction planning begins.
What the FHSA Actually Is
The FHSA is a registered account designed for Canadians who have never owned a home before (or haven’t in the past four years). It allows you to:
✔ Deduct contributions from your income (like RRSP)
✔ Grow your investments tax-free (like TFSA)
✔ Withdraw tax-free when buying a first home
If used properly, the FHSA can reduce taxable income today, grow capital tax-free, and then be withdrawn without repayment when it’s time to purchase.
Eligibility Criteria (2026)
You can open an FHSA if you:
• Are a Canadian resident
• Are 18 or the age of majority in your province
• Are a first-time home buyer, meaning you have not owned a home you lived in during the current year or the past 4 calendar years
• Have not yet turned 71
If you last owned a home more than 4 years ago, you may be eligible again under CRA rules.
Contribution Limits
The FHSA contribution rules are straightforward:
| FHSA Limit |
Amount |
| Annual limit |
$8,000 per year |
| Lifetime limit |
$40,000 total |
| Carry-forward |
Up to $8,000 |
Carry-forward begins only after the account is opened, so opening early helps even if you can’t contribute right away.
Contributions are tax-deductible, allowing many buyers to recover income tax refunds that can be recycled back into the FHSA or used for closing costs.
Withdrawal Rules
To make a tax-free qualifying withdrawal, you must:
✔ Have a written purchase or build agreement for a qualifying home
✔ Intend to occupy the home as a principal residence within 12 months
✔ Maintain Canadian residency until acquisition
Unlike the RRSP Home Buyers’ Plan (HBP), FHSA withdrawals:
❌ do not need to be repaid
This is a major advantage for first-time buyers balancing mortgage qualification ratios.
Buyers can also combine FHSA + HBP, allowing access to more capital.
FHSA - Bank by Bank Comparison (2026)
Because the FHSA is still relatively new, different banks have structured their offerings differently. Some emphasize high-interest savings, while others push investment portfolios or DIY trading.
Here’s a practical breakdown:
1. Major Banks (Big 6)
| Bank |
FHSA Cash Rate (2026) |
Investment Options |
Best For |
| BMO |
~2.00% |
GICs, mutual funds |
Balanced savers |
| CIBC |
~2.00% |
Savings + GICs |
High-interest seekers |
| National Bank |
0.55% – 2.25% tiered |
ETFs + mutual funds |
Quebec & Ontario buyers |
| Scotiabank |
~0.25% |
Scotia iTrade + mutual funds |
Investors |
| TD |
~0.05% |
TD Direct Investing |
DIY traders |
| RBC |
Not marketed as HISA |
Mutual funds + ETFs |
Portfolio focus |
Key insight:
The Big 6 do not aggressively compete on FHSA cash rates, most prefer to position the FHSA as an investment vehicle.
2. Credit Unions & Online Banks (Top Rates — 2026)
| Institution |
FHSA Savings Rate |
Notes |
| FirstOntario CU |
~3.20% (promo) |
Strong Ontario choice |
| SAVEN Financial |
~2.85% |
Digital platform |
| Meridian CU |
~2.75% |
Solid steady rates |
| SASCU |
~2.70% |
BC-based |
| Hubert Financial |
~2.30% |
Often rate competitive |
| EQ Bank |
~1.50% |
Lower HISA, strong GIC lineup |
These are relevant because many buyers in Toronto and GTA use Ontario credit unions due to better rates and simpler onboarding.
FHSA GIC Rates (2026)
Most FHSAs allow GICs, which are popular for 2–3 year savings horizons.
| GIC Term |
Typical 2026 Registered Rate |
| 1 Year |
~2.4% – 3.0% |
| 2 Year |
~2.6% – 3.2% |
| 3 Year |
~2.7% – 3.3% |
| 5 Year |
~3.0% – 3.8% |
This suits buyers who already see a path to closing within a defined time window.
How First-Time Buyers Should Strategize the FHSA
Different time horizons call for different mixes:
0–24 Months to Purchase
→ Keep funds safe
✔ FHSA HISA
✔ Short GIC ladder
3–5 Years to Purchase
→ Blend growth + safety
✔ ETFs + GICs combo
5+ Years
→ Maximize growth
✔ ETFs / stocks inside FHSA
For many first-time buyers in Toronto, the journey does not end at closing. The majority of entry-level homes require:
• Renovations
• Additions
• Energy upgrades
• Secondary units
• Layout reconfigurations
Leveraging the FHSA can accelerate that first purchase, while renovation planning maximizes long-term value.
Buyers commonly ask Grand Design Build questions such as:
“Can I buy smaller now and build later?”
“Should I add a second unit for rental income?”
“Can I add a floor or rear addition to expand value?”
Those decisions are directly tied to capital, mortgage structure, and tax-efficient saving - FHSA included.
Frequently Asked Questions
Can I use FHSA and Home Buyers’ Plan together?
→ Yes. This allows buyers to combine tax-advantaged funds.
Can my spouse also open an FHSA?
→ Yes. Two spouses can stack their accounts.
Do I have to repay the FHSA?
→ No repayment required for qualifying withdrawals.
What if I never buy a home?
→ FHSA can be transferred to RRSP/RRIF tax-free.
Does FHSA affect my RRSP contribution room?
→ No. Transfers do not consume RRSP room.
