Tax Free First Home Savings Account

Trish Pritchard • April 4, 2023

Canada’s new tax-free First Home Savings Account kicks in April 1. Here’s what you need to know

The dream of home ownership may be a just little closer this year for Canadians, with the introduction of a new tax-free first home savings account. The new Tax-Free First Home Savings Account (FHSA) rolls out April 1, 2023 with the intention of helping Canadians save towards their first home.

Home affordability in Canada has been a significant challenge for first-time buyers. The high cost of housing in major cities, combined with low inventory levels and increased demand, has led to a surge in home prices. This has made it difficult for first-time buyers to save enough for a down payment, let alone afford a mortgage.

The pandemic has further exacerbated the situation, with many Canadians experiencing job losses or reduced income. As a result, the dream of owning a home has become increasingly out of reach for many young Canadians, and policymakers are grappling with solutions to make housing more affordable.


Enter the Tax-Free First Home Savings Account (FHSA)

Part of the Liberal government’s 2022 federal budget proposal tackled the ever-growing issue of home affordability. They’ve introduced a new way to save up to $40,000 for your first home, tax-free, called the Tax-Free First Home Savings Account (FHSA).

You can open your new Tax-Free First Home Savings Account from April 1, 2023 and it will allow Canadians who are at least 18 to save up to $40,000 for their first home.

If eligible, you can contribute up to $8,000 each year to the account but you have to use these funds within 15 years of first opening an FHSA or before you turn 71 (whichever is earlier), otherwise the account would have to be closed.


What are the benefits of the Tax-Free First Home Savings Account (FHSA)?

This new account is a great way to save for your homebuying goals because you don’t pay a tax bill on gains from these savings. For example, if you save $40,000, invest that amount, and gain $20,000 on your investment, you’ll now have $60,000 to put towards your house purchase as the $20,000 would be essentially tax-free. Similar to a Registered Retirement Savings Plan (RRSP), which gives you tax-deduction perks, and a Tax-Free Savings Account (TFSA), as your investments grow, they are not taxed. This means that the money you put in and earn in this account goes towards the down payment of your first home.


Who is eligible for the Tax-Free First Home Savings Account (FHSA)?

So, who can use the new account? There are three important components to qualify for this investment vehicle.

  • You need to be a resident of Canada
  • You have to be at least 18 years of age (or the age of majority in your province or territory)
  • You or your spouse can’t own a home in which you lived, at any time in the year the account is opened or during the previous four calendar years


Am I eligible for the FHSA if my spouse is a homeowner but I’m not?

You are not eligible for the FHSA if your spouse’s property has been your principal place of residence in the current year or in the last four years.

However, if you separate and don’t live in that residence for at least four years and don’t purchase another property yourself, you’re then eligible to open an FHSA.

However, if you no longer have a spouse who’s an owner and you have not owned your main place of residence yourself for more than 4 years, you’re then eligible to open an FHSA.


How long do I have to buy my first property with the Tax-Free First Home Savings Account?

You’re allowed to hold an FHSA for 15 years or until age 71. This means that you have until December 31 of the year in which you either reach the 15th anniversary of your account opening or turn 70 to use your FHSA to purchase your first property.

Your FHSA must be closed by December 31 of the year following the date of your first qualifying withdrawal.


What do I do with unused money in my FHSA?

Suppose you bought a property, but still have money left over in your FHSA. If you still have money in your FHSA at the time of closing, several options are open to you:

  1. Make a tax-free direct transfer to an RRSP or RRIF without affecting your RRSP contribution room.
  2. Withdraw the money, which is subject to tax withholding, and deposit it into a daily chequing account. You could also reinvest it in a TFSA, for example.


What’s the difference between the FHSA and HBP?

You may already be familiar with the HBP Home Buyers Plan, which is a Canadian government program that allows first-time homebuyers to withdraw up to $35,000 from their registered retirement savings plan (RRSP) to use as a down payment on their first home. HBP is also designed to help Canadians enter the housing market by providing them with tax-free funds to put towards the purchase of their first home. However, there are key difference between the newly-introduced FHSA and the HBP.


FHSA (tax-free first home savings account)

The Tax-Free First Home Savings Account is a new registered account that provides tax-free savings for first-time home buyers.

  • No repayment required
  • No withdrawal limit
  • Maximum annual contributions of $8,000 and a lifetime total of $40,000
  • No minimum holding period required for contributions to be deductible and eligible for withdrawal
  • The deadline for contributions to a FHSA is December 31 of each year


HBP (Home Buyer’s Plan)

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your RRSP to buy or build a first home.

  • Repayment required
  • Withdrawal limit of $35,000
  • Maximum annual contributions of the RRSP, which is 18% of your previous year’s income or the current fixed contribution limit
  • The money must be deposited into your RRSP 90 days before you withdraw it under the HBP
  • Deadline for RRSP contributions: 60 days after the end of the year


Can I combine the FHSA and HBP?

Yes, you can combine the FHSA with the HBP. In addition to making a withdrawal from your FHSA for the purchase or construction of a first home, you can also draw up to $35,000 from your RRSP under the HBP program. Are you a couple? You can each combine your respective FHSA accounts with an HBP withdrawal to maximize your down payment.


This article was originally published on Deeded.ca here.
TRISH PRITCHARD
MORTGAGE BROKER

CONTACT ME

Your Guide to Real Estate Investment in Canada

By Trish Pritchard • April 15, 2026
Your Guide to Real Estate Investment in Canada Real estate has long been one of the most popular ways Canadians build wealth. Whether you’re purchasing your first rental property or expanding an existing portfolio, understanding how real estate investment works in Canada—and how it’s financed—is key to making smart decisions. This guide walks through the fundamentals you need to know before getting started. Why Canadians Invest in Real Estate Real estate offers several potential benefits as an investment: Long-term appreciation of property value Rental income that can support cash flow Leverage , allowing you to invest using borrowed funds Tangible asset with intrinsic value Portfolio diversification beyond stocks and bonds When structured properly, real estate can support both income and long-term net worth growth. Types of Real Estate Investments Investors typically focus on one or more of the following: Long-term residential rentals Short-term or vacation rentals (subject to local regulations) Multi-unit residential properties Pre-construction or assignment purchases Value-add properties that require renovations Each type comes with different financing rules, risks, and return profiles. Down Payment Requirements for Investment Properties In Canada, investment properties generally require higher down payments than owner-occupied homes. Typical minimums include: 20% down payment for most rental properties Higher down payments may be required depending on: Number of units Property type Borrower profile Lender guidelines Down payment source, income stability, and credit history all play a role in approval. How Rental Income Is Used to Qualify Lenders don’t always count 100% of rental income. Depending on the lender and mortgage product, they may: Use a rental income offset , or Include a percentage of rental income toward qualification Understanding how income is treated can significantly impact borrowing power. Financing Options for Investors Investment financing can include: Conventional mortgages Insured or insurable options (in limited scenarios) Alternative or broker-only lenders Refinancing equity from existing properties Purchase plus improvements for value-add projects Access to multiple lenders is often crucial for investors as portfolios grow. Key Costs Investors Should Plan For Beyond the purchase price, investors should budget for: Property taxes Insurance Maintenance and repairs Vacancy periods Property management fees (if applicable) Legal and closing costs A realistic cash-flow analysis is essential before buying. Risk Considerations Like any investment, real estate carries risk. Key factors to consider include: Interest rate changes Market fluctuations Tenant turnover Regulatory changes Liquidity (real estate is not easily sold quickly) A strong financing structure can help manage many of these risks. The Role of a Mortgage Professional Investment mortgages are rarely “one-size-fits-all.” Lender policies vary widely, especially as you acquire more properties. Working with an independent mortgage professional allows you to: Compare multiple lender strategies Structure financing for long-term growth Preserve flexibility as your portfolio evolves Avoid costly mistakes early on Final Thoughts Real estate investment in Canada can be a powerful wealth-building tool when approached with a clear strategy and proper financing. Whether you’re exploring your first rental property or planning your next acquisition, understanding the numbers—and the lending landscape—matters. If you’d like to discuss investment property financing, run the numbers, or explore your options, feel free to connect. A well-planned mortgage strategy can make all the difference in long-term success.

Best Mortgage Options for Canadian Homebuyers

By Trish Pritchard • April 8, 2026
Thinking of Calling Your Bank for a Mortgage? Read This First. If you're buying a home or renewing your mortgage, your first instinct might be to call your bank. It's familiar. It's easy. But it might also cost you more than you realize—in money, flexibility, and long-term satisfaction. Before you sign anything, here are four things your bank won’t tell you—and four reasons why working with an independent mortgage professional is the smarter move. 1. Your Bank Offers Limited Mortgage Options Banks can only offer what they sell. So if your financial situation doesn’t fit neatly into their guidelines—or if you’re looking for competitive terms—you might be out of luck. Working with a mortgage broker? You get access to mortgage products from hundreds of lenders : major banks, credit unions, monoline lenders, alternative lenders, B lenders, and even private funds. That means more options, more flexibility, and a much better chance of finding a mortgage that fits you. 2. Bank Reps Are Salespeople—Not Mortgage Strategists Let’s be honest: most bank mortgage reps are trained to sell their employer’s products—not to analyze your financial goals or tailor a long-term mortgage plan. Their job is to generate revenue for the bank. Independent mortgage professionals are different. We’re not tied to one lender—we’re tied to you. Our job is to shop around, negotiate on your behalf, and recommend the mortgage that offers the best balance of rate, terms, and flexibility. And yes, we get paid by the lender—but only after we find you a mortgage that works for your situation. That creates a win-win-win: you get the best deal, we earn our fee, and the lender earns your business. 3. Banks Don’t Lead with Their Best Rate It’s true. Banks often reserve their best rates for those who ask for them—or threaten to walk. And guess what? Most people don’t. Over 50% of Canadians accept the first renewal offer they get by mail. No questions asked. That’s exactly what the banks count on. Mortgage professionals don’t play that game. We start by finding lenders offering competitive rates upfront, and we handle the negotiations for you. There’s no guesswork, no pressure, and no settling for less than you deserve. 4. Bank Mortgages Are Often More Restrictive Than You Think Not all mortgages are created equal. Some come with hidden traps—especially around penalties. Ever heard of a sky-high prepayment charge when someone breaks their mortgage early? That’s often due to something called an Interest Rate Differential (IRD) —and big banks are notorious for using the harshest IRD calculations. When we help you choose a mortgage, we don’t just focus on the interest rate. We look at the whole picture, including: Prepayment privileges Penalty calculations Portability Future flexibility That way, if your life changes, your mortgage won’t become a financial anchor. A Quick Recap What your bank typically offers: Only their own limited mortgage products Sales-focused representatives, not mortgage strategists Default rates that aren’t usually their best Restrictive contracts with high penalties What an independent mortgage professional delivers: Access to over 200 lenders and customized mortgage solutions Personalized advice and long-term financial strategy Competitive rates and terms upfront Transparent, flexible mortgage options designed around your needs Let’s Talk Before You Sign Your mortgage is likely the biggest financial commitment you’ll ever make. So why settle for a one-size-fits-all solution? If you're buying, refinancing, or renewing, I’d love to help you explore your options, explain the fine print, and find a mortgage that truly works for you. Let’s start with a conversation—no pressure, just good advice.

Collateral vs. Standard Mortgage: Pros and Cons Explained

By Trish Pritchard • April 1, 2026
Mortgage Registration 101: What You Need to Know About Standard vs. Collateral Charges When you’re setting up a mortgage, it’s easy to focus on the rate and monthly payment—but what about how your mortgage is registered? Most borrowers don’t realize this, but there are two common ways your lender can register your mortgage: as a standard charge or a collateral charge . And that choice can affect your flexibility, future borrowing power, and even your ability to switch lenders. Let’s break down what each option means—without the legal jargon. What Is a Standard Charge Mortgage? Think of this as the “traditional” mortgage. With a standard charge, your lender registers exactly what you’ve borrowed on the property title. Nothing more. Nothing hidden. Just the principal amount of your mortgage. Here’s why that matters: When your mortgage term is up, you can usually switch to another lender easily —often without legal fees, as long as your terms stay the same. If you want to borrow more money down the line (for example, for renovations or debt consolidation), you’ll need to requalify and break your current mortgage , which can come with penalties and legal costs. It’s straightforward, transparent, and offers more freedom to shop around at renewal time. What Is a Collateral Charge Mortgage? This is a more flexible—but also more complex—type of mortgage registration. Instead of registering just the amount you borrow, a collateral charge mortgage registers for a higher amount , often up to 100%–125% of your home’s value . Why? To allow you to borrow additional funds in the future without redoing your mortgage. Here’s the upside: If your home’s value goes up or you need access to funds, a collateral charge mortgage may let you re-borrow more easily (if you qualify). It can bundle other credit products—like a line of credit or personal loan—into one master agreement. But there are trade-offs: You can’t switch lenders at renewal without hiring a lawyer and paying legal fees to discharge the mortgage. It may limit your ability to get a second mortgage with another lender because the original lender is registered for a higher amount than you actually owe. Which One Should You Choose? The answer depends on what matters more to you: flexibility in future borrowing , or freedom to shop around for better rates at renewal. Why Talk to a Mortgage Broker? This kind of decision shouldn’t be made by default—or by what a single lender offers. An independent mortgage professional can help you: Understand how your mortgage is registered (most people never ask!) Compare lenders that offer both options Make sure your mortgage aligns with your future goals—not just today’s needs We look at your full financial picture and explain the fine print so you can move forward with confidence—not surprises. Have questions? Let’s talk. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you make smart, informed choices about your mortgage. No pressure—just answers.