RRSP Home Buyers’ Plan repayment runs on a schedule that catches a lot of first-time buyers off guard, because the bill doesn’t start the year you withdraw the money, and for many buyers who withdrew between 2022 and 2025, it doesn’t start on the schedule most articles describe either. If you already used the HBP to help buy your first home and you’re trying to work out when your repayments actually begin, how much you owe each year, and what happens if you miss one, this guide covers the mechanics in order. For the rest of what buying and owning a Toronto property involves, see our complete Toronto real estate guide.
What the RRSP Home Buyers’ Plan is
The Home Buyers’ Plan lets a first-time buyer withdraw money from their own RRSP, tax-free at the time of withdrawal, to put toward buying or building a home. It isn’t free money. It’s an interest-free loan from your own retirement savings to yourself, and the whole plan hinges on paying it back over time so your RRSP actually recovers the room you borrowed. It’s a different program from the FHSA, the First Home Savings Account, which lets you contribute new money and withdraw it tax-free with no repayment requirement at all. The two are often used together by the same buyer, but they run on completely different rules, and this guide covers HBP repayment only. For the FHSA’s own contribution rules and the Toronto land transfer tax rebates, see our first-time buyer’s guide.
How much you can withdraw under the HBP
The current HBP withdrawal limit is $60,000 per individual. It applies to withdrawals made on or after April 16, 2024, when the federal government raised it from the previous $35,000 limit as part of that year’s budget. Two first-time buyers purchasing together, a couple or co-buyers who each qualify individually, can each withdraw up to $60,000 from their own RRSP, for a combined $120,000 toward the same purchase. The withdrawal itself isn’t taxed as income when you take it out, which is the entire appeal of the plan, but every dollar comes with a repayment obligation attached from the moment you withdraw it.
When repayment actually starts
This is the part that trips people up, because the rule changed and then changed back. Under the standard rule, repayment starts in the second year after the calendar year you made your first HBP withdrawal, and runs for 15 years after that. Someone who withdrew in 2026, for example, has 2026 and 2027 as a grace period and makes their first required repayment in 2028.
But anyone whose first HBP withdrawal fell between January 1, 2022 and December 31, 2025 is on a different, temporarily extended timeline. The federal government stretched the grace period for that specific group from two years to five years, so repayment starts in the fifth year after the withdrawal year instead of the second. A buyer who first withdrew in 2022 makes their first repayment in 2027, not 2024. One who withdrew in 2023 starts in 2028. One who withdrew in 2024 or 2025 starts in 2029 or 2030 respectively. The 15-year repayment period itself didn’t get any longer, only the grace period before it begins, so a longer wait upfront still means the same total repayment window once it starts. For withdrawals made from 2026 onward, the extension has lapsed and the standard two-year grace period applies again. If you’re not certain which withdrawal year applies to you, check the HBP balance and repayment start date on your most recent Notice of Assessment from the CRA, since it states your exact figures rather than leaving you to work them out from the general rule.
How the annual minimum repayment is calculated
Once your repayment period starts, the minimum you owe each year isn’t a flat number fixed for all 15 years. It’s your remaining HBP balance divided by the number of years left in your repayment period, recalculated every year. Your very first required payment is your full withdrawal amount divided by 15. Say you withdrew the maximum $60,000: your first year’s minimum is $60,000 divided by 15, or $4,000. If you pay exactly that minimum every year and nothing more, the number stays constant at $4,000 for all 15 years, since the balance and the years remaining shrink at the same rate.
You designate each year’s repayment on Schedule 7, RRSP, PRPP and SPP Contributions and Transfers and HBP and LLP Activities, and report the amount on line 24600 of your income tax and benefit return. The CRA sends an annual HBP statement showing your remaining balance and that year’s minimum required payment, and the same figures also appear in your CRA My Account and on your Notice of Assessment, so you don’t need to track the math yourself once you’re a few years in.
What happens if you miss the minimum
If you repay less than the required minimum in a given year, and sometimes that means paying nothing at all, the shortfall doesn’t just roll forward quietly. The difference between what you owed and what you actually repaid gets added to your income for that tax year, reported on line 12900 of your return, and taxed at your marginal rate like any other income. If your minimum was $4,000 and you repaid $2,500, that $1,500 gap becomes taxable income on top of your regular earnings for the year.
The RRSP contribution room you used doesn’t get restored by that tax hit, and the balance you still owe on the HBP doesn’t shrink because you paid tax on the shortfall instead of repaying it. You still owe the rest in future years, calculated the same way, remaining balance divided by years remaining, so a missed year makes every subsequent year’s minimum slightly higher rather than letting you catch up by doubling a future payment on your own schedule. There’s no separate CRA penalty or interest charge beyond that income inclusion, but paying tax on money you already withdrew tax-free, without it counting toward your repayment, is the real cost of missing a year.
Making extra or early repayments
You can repay more than the minimum in any year, or repay the entire remaining balance at once, with no penalty for doing so. Because the minimum recalculates every year as your remaining balance divided by your remaining years, paying extra genuinely lowers what you owe in every year that follows, not just the year you overpaid. A buyer with a $60,000 balance whose standard minimum is $4,000 a year who pays an extra $4,000 in one year, on top of that year’s required minimum, cuts their remaining balance enough that every future year’s required minimum drops with it. Extra repayments go back into your RRSP the same way a regular repayment does, so beyond clearing the HBP obligation faster, they also restore RRSP room you can put toward retirement savings again rather than leaving it tied up in a 15-year repayment schedule.
Frequently asked questions
How much can I withdraw under the RRSP Home Buyers’ Plan?
The current limit is $60,000 per individual, for withdrawals made on or after April 16, 2024, when the federal government raised it from the previous $35,000 limit. Two first-time buyers purchasing together can each withdraw up to $60,000 from their own RRSP, giving a combined $120,000 toward the same home if both qualify individually. The withdrawal itself isn’t taxed as income at the time you take it out, which is the core benefit of the plan, but the full amount has to be repaid to your RRSP over time or it eventually gets added to your taxable income instead. This limit applies per person, not per household, so how much a specific buyer or couple can access depends on how much each individual actually has available in their own RRSP to withdraw.
When does RRSP Home Buyers’ Plan repayment actually start?
It depends entirely on the year of your first withdrawal, and the rule has changed. Under the standard rule, repayment begins in the second year after the year you made your first withdrawal, so a 2026 withdrawal means your first payment is due in 2028. But anyone whose first withdrawal fell between January 1, 2022 and December 31, 2025 gets a temporarily extended five-year grace period instead of two, with repayment starting in the fifth year after the withdrawal year. That means a 2022 withdrawal starts repayment in 2027, a 2023 withdrawal in 2028, and so on through 2025 withdrawals starting in 2030. The standard two-year grace period resumes for withdrawals made from 2026 onward. Your CRA Notice of Assessment states your exact repayment start date and current balance, which is the most reliable way to confirm your own timeline rather than working it out from the general rule.
How is the annual minimum HBP repayment calculated?
The minimum is your remaining HBP balance divided by the number of years left in your 15-year repayment period, and it recalculates every year rather than staying fixed. Your first required payment is your total withdrawal divided by 15, so a full $60,000 withdrawal produces a $4,000 first-year minimum. If you only ever pay the minimum, that $4,000 figure stays constant because the balance and the years remaining shrink together at the same rate. You designate the repayment on Schedule 7 of your tax return and report it on line 24600. The CRA sends an annual statement showing your exact remaining balance and that year’s required minimum, and the same numbers also show up in your CRA My Account and on your Notice of Assessment, so you don’t need to recalculate it yourself once your repayment period is underway.
What happens if I don’t repay the HBP minimum in a given year?
The shortfall between what you owed and what you actually repaid gets added to your income for that tax year, reported on line 12900 of your tax return, and taxed at your normal marginal rate. If your minimum was $4,000 and you repaid nothing, the full $4,000 becomes taxable income on top of your regular earnings, and it doesn’t count as a repayment toward your remaining balance. You still owe the rest of what you withdrew in future years, and because the minimum recalculates as remaining balance divided by remaining years, a missed year makes every subsequent year’s required minimum a little higher rather than letting you make it up later on your own timeline. There’s no additional CRA penalty or interest charge beyond that income inclusion, but effectively paying tax on money you already received tax-free, without it reducing what you still owe, is the real cost of skipping a year.
Can I repay the HBP faster than the minimum, and does that help?
Yes, and it genuinely reduces what you owe in every future year, not just the year you pay extra. Because the minimum recalculates annually as your remaining balance divided by your remaining years, any amount above that year’s required minimum shrinks the balance the next year’s calculation is based on, lowering every subsequent minimum along with it. You can also repay the entire remaining balance at once with no penalty. Extra repayments go back into your RRSP exactly like the required minimum does, so beyond clearing the HBP obligation sooner, they also restore RRSP contribution room you can use for retirement savings again instead of leaving it committed to a 15-year repayment schedule. There’s no reason to wait if you have the funds available and would rather close out the obligation than keep it running for the full term.
Your CRA Notice of Assessment and My Account both show your exact HBP balance and this year’s required minimum, which is the most reliable way to confirm your own numbers rather than relying on the general schedule. If you’re still saving toward a first purchase and haven’t used the HBP yet, browse current Toronto listings to see what a real purchase price means for your own down payment plan, or explore the rest of our guides for what else comes with buying and owning in Toronto.