First-Time Home Buyer Guide Canada (2026): FHSA, HBP, Rebates, and Order of Operations
The cheque-by-cheque timing of the FHSA is the existing FHSA sequencing guide. The repayment math on the RRSP withdrawal is the Home Buyers' Plan guide. How the lender turns your income into a maximum loan is the stress test. The hub for the rate, the term, and the penalty is the Canadian mortgage guide. Provincial land transfer rebates live in the closing cost guide, and other cash programs are the grants beyond the FHSA.
- Open the FHSA when you are eligible. Room starts the year you open. It does not backdate. Unused room carries forward, and the carry-forward used in CRA's formula is capped at $8,000, so a later year tops out at $16,000. The lifetime limit is $40,000.
- "First-time buyer" is a different legal test for the FHSA, the HBP, line 31270, and CMHC Home Start. Passing one does not prove the others.
- For a 2026 purchase, line 31270 is a claim of up to $10,000. At the 14% lowest federal rate, a full claim is $1,400. CRA's older tip still says up to $1,500, which is the 15% arithmetic.
- Minimum insured down payment is 5% of the first $500,000 and 10% of the rest, on a home priced under $1.5 million. CMHC's own $760,000 example needs $51,000 down, not 5%.
- A 30-year insured amortization is CMHC Home Start: a first-time buyer or a new build, loan-to-value above 80%. The premium is 0.20 percentage points higher than the 25-year schedule in the matching band.
Which first-time test applies to which program?
| Program | What you get | The test to read before you rely on it |
|---|---|---|
| FHSA | $8,000 participation room in the year you open, then $8,000 a year, lifetime $40,000. Contributions are generally deductible. A qualifying withdrawal is tax-free. | Opening and withdrawing use related tests that are not identical. The sequencing guide and the FHSA guide split them. |
| Home Buyers' Plan | Up to $60,000 per person from an RRSP, with no tax withheld if the withdrawal qualifies. A 2026 first withdrawal starts repayment in 2031. | CRA's participation conditions, including a written agreement and occupancy within a year. Details are the HBP guide. |
| Home buyers' amount, line 31270 | Claim up to $10,000. At 14% for 2026, the federal credit is $1,400. You can split the $10,000 with a spouse. The combined claim cannot exceed $10,000. | CRA: you did not live in a home you or your spouse owned in the year of purchase or the four preceding years. A disability exception exists. |
| CMHC Home Start, 30-year amortization | Insured amortization up to 30 years, at a higher premium, for a high-ratio loan. | At least one borrower is a first-time buyer under CMHC's definition, or the home is newly built and not previously occupied. Price under $1.5 million. Loan-to-value above 80%. |
| Land transfer rebates | Provincial and, in Toronto, municipal. Amounts differ. | The closing cost guide. Do not import another province's rebate. |
Table as of September 2026. Sources: CRA FHSA pages, CRA Home Buyers' Plan page, CRA line 31270, CRA's 2026 federal rates, Finance's report on the 14% rate and non-refundable credits, and CMHC Home Start.
What order should the money move in?
- Confirm each first-time test on its own. A person who owned a home years ago can fail one program and pass another. Spouses are often tested together. Read both names against each program.
- Open the FHSA as soon as you are eligible, even with a small deposit, so the annual room starts. The sequencing guide is the calendar. Room that never started cannot be contributed in the month you waive conditions.
- Season any RRSP contribution you plan to withdraw. Amounts contributed shortly before a Home Buyers' Plan withdrawal can lose their deduction. The HBP guide covers the 89-day problem and Form T1036. Do the contribution before you are against the closing date.
- Price the minimum down payment with the tiered formula once the price is over $500,000. Then add closing costs in cash. If the FHSA exactly equals the down payment, you are short by the land transfer tax and the lawyer.
- Get a qualifying-rate approval before you offer. The stress test uses the greater of the contract rate plus 2 points or 5.25%. An insured file also has to fit 39% gross and 44% total debt service at that rate.
- Claim line 31270 on the return for the year you buy. A September 2026 purchase is a 2026 claim. The credit rate for 2026 follows the 14% lowest bracket.
What does CMHC actually charge?
CMHC's own comparison, on its Purchase page, uses a $760,000 home. Twenty percent down is $152,000. The insured minimum is 5% of $500,000 plus 10% of $260,000, which is $51,000. Insurance is what turns $152,000 of cash into $51,000 of cash, in exchange for a premium added to the mortgage and for the qualifying-rate test.
Minimum down payment: 5% of $500,000 plus 10% of $100,000 = $35,000. Base loan: $565,000. Loan-to-value is about 94.2%, so the premium is in the top band. On CMHC's 25-year Purchase schedule that band is 4.00%, which is $22,600, and the insured balance is $587,600. At an assumed 4.50% contract rate, compounded semi-annually, the 25-year payment is about $3,252 a month.
If a first-time buyer uses Home Start's 30-year amortization, the matching premium on CMHC's Home Start schedule is 4.20%, which is $23,730, and the balance is $588,730. The payment at the same assumed 4.50% is about $2,968 a month, roughly $284 less. Total interest over the full amortization, if that 4.50% never changed, is about $92,000 higher on the 30-year loan. The rate will change at renewal. The illustration is the trade: a lower payment now, a higher premium, and more interest if you keep the longer schedule. Premiums are CMHC's published schedules. The 4.50% rate is an assumption.
Standard Purchase premiums run from 0.60% at 65% loan-to-value up to 4.00% above 90%, and 4.50% in that top band if the down payment is non-traditional. Home Start's high-ratio schedule is 3.00%, 3.30%, and 4.20%, plus 4.70% for a non-traditional down payment in the top band. A non-traditional down payment includes borrowed money. A gift from a relative is on CMHC's traditional list. New-build buyers should also read CRA's GST/HST new housing rebate page for the year they close. Rebate thresholds move, and this guide does not quote a GST figure it has not pinned to the purchase year.
The down payment can be FHSA money, HBP money, or both, for the same home. CRA says so on the Home Buyers' Plan page. What you should not do is borrow from a line of credit to contribute to the FHSA or the RRSP and then assume the story is still simple. The clean account order is the sequencing guide. The contribution ceilings for the year are the 2026 limits table.
Frequently asked questions
Can I use the FHSA and the Home Buyers' Plan on the same house?
Yes. CRA's Home Buyers' Plan page says you can make an HBP withdrawal and a qualifying FHSA withdrawal for the same home if you meet the conditions of each one at the time you withdraw. They are separate tests, separate forms, and separate clocks. The HBP has to be repaid. A qualifying FHSA withdrawal does not.
How much is the federal home buyers' amount worth in 2026?
You claim up to $10,000 on line 31270. Non-refundable credits use the lowest federal rate. For 2026 that rate is 14%, so a full claim is $1,400. Spouses can split the $10,000. The total claim stays $10,000. CRA's older "up to $1,500" wording is the credit at 15%. Confirm the 2026 return instructions, including any top-up credit, when you file.
Is the minimum down payment 5%?
Five percent applies to the first $500,000 of an insured purchase. The portion between $500,000 and $1.5 million needs 10% down. CMHC's $760,000 example is $51,000 down, which is more than 5%. Homes at or above $1.5 million are outside high-ratio insurance, so the practical down payment is at least 20%.
Should a first-time buyer take the 30-year amortization?
Home Start offers it on a high-ratio loan if at least one borrower is a first-time buyer or the home is a new build. The premium in the top band rises from 4.00% to 4.20%. On the $600,000 illustration, the payment falls by about $284 a month at a constant 4.50%, and lifetime interest rises by about $92,000 if the rate never changes. Take the longer amortization if you need the payment to qualify or to stay solvent. Shorten it with prepayments if the cash shows up later.
Do provincial rebates stack on top of the federal credit?
Land transfer rebates are provincial, and Toronto has its own municipal tax. They are cash at closing, or a reduction of cash at closing. The federal home buyers' amount is a credit on the tax return. They answer different bills. Use the closing cost guide for the province where the house is, and do not assume Ontario's rebate exists in another province.
What if only one spouse is a first-time buyer?
Several of these tests look at whether you or your spouse lived in a home either of you owned. One partner's ownership can disqualify the other. CMHC Home Start can be available if at least one borrower meets its first-time definition, which is its own wording. Run each name through each program before you promise a parent the down payment is sorted.
Sources
- CRA: First Home Savings Account
- CRA: Home Buyers' Plan
- CRA: line 31270, home buyers' amount
- CRA: 2026 federal income tax rates
- Finance: 14% rate and non-refundable credits
- CMHC Purchase and CMHC Home Start
- Department of Finance: insured price cap and 30-year amortization
The rebates are small next to a missed FHSA year or a bad mortgage penalty.
The accounts and the credit are tax. The 2026 tax guide is the filing companion to this purchase order.
Get the 2026 Tax Guide — $49 CAD
