First Home Savings Account – FHSA Explained

General Drew Hermiston 10 Mar

On April 1st, 2023 the Canadian government will be rolling out a new savings program to help First Time Homebuyers save for a down payment. This program allows individuals to save $40,000 on a tax-free basis. Here is the First Home Savings Account Explained.

How does this differ from existing programs?

Prior to April 1st 2023 the two main vehicles used by  first time homebuyers to save for a down payment were through either a TFSA (Tax Free Savings Account) or RRSP (Registered Retirement Savings Program). Each has their own pros and cons associated with these accounts. The new First Home Savings Account will essentially combine the key attributes of a TFSA and RRSP into one account.

Benefits of RRSP for Down Payment

The benefit of saving through an RRSP account for the purposes of a down payment is that you are able to take advantage of tax deductions from  your contributions allowing you to pay less income tax. Through the current Canadian Home Buyers plan you are able to withdraw up to $35,000 tax-free from your RRSP. The disadvantages of this plan for the purpose of a down payment are that you  have to repay whatever you withdrew from your RRSP within 15 years of withdrawal.

Benefits of TFSA for Down Payment

The benefit of saving through a TFSA for the purposes of a down payment is that you are able to withdraw funds completely tax-free, without having to deposit funds back into the account like the RRSP through the Home Buyers Plan. The disadvantage to this account is that you are unable to receive tax deductions for any contributions you make to this account.

FHSA Explained

This is where this new FHSA program comes in. This account allows you to save up to $40,000 on a tax-free basis. Through this account you are able to have the benefits of tax deductions similar to the RRSP, with the ability to withdraw the funds for purpose of purchasing your first home tax-free like a TFSA. You are also not required to replace the withdrawn funds within any timeframe.

Qualified individuals can contribute up to $8,000 per year and any unused contributions carry over to the next year, for a lifetime maximum contribution of $40,000.

Individuals can open a FHSA through Canadian trust companies, life insurance companies, banks and credit unions.

You can then use this account to invest in mutual funds, publicly traded securities, ETFs, bonds or GICs in order to maximize your savings.

All in all, if you are saving money for the purposes of a down payment on your first home the FHSA is definitely something Canadians should be taking advantage of.


If you are a First Time Homebuyer and are interested in learning more about the mortgage process or want to see what home price you could be approved for, reach out to myself to set up a mortgage consultation.

Interested in a pre-approval? Apply HERE

Schedule a Free No Obligation Consultation by clicking HERE


Drew Hermiston

Mortgage Agent

Dominion Lending Centres YBM Group

Tel: 705-818-5865

Lic# 11129

Each Office Independently Owned and Operated


Investing in Real Estate VS. Through RRSP/RESP/Mutual Funds

General Drew Hermiston 1 Feb

I want to start this by saying that I understand that investing in RRSP/Mutual Funds, TFSA, etc, makes sense for some people BUT you are missing out on a huge opportunity since you aren’t leveraging someone else’s money and only earning money on your own hard earned cash. Investing in real estate gives you the opportunity to put only 20% of the total property value and let someone else pay off the mortgage for you.

Here is a breakdown – the numbers don’t lie…

In order to show the difference, we need to compare apples to apples. In this example we will assume you are putting $400/mth away into an RESP, RRSP, TFSA, Mutual Funds or Savings Account.

RRSP/RESP/Mutual Funds

$400 investment each month
12 months/year
15 years
4% Annual return on investment

$98,436 = Total Savings After 15 years

Real Estate Investment

$400/mth would be the approx. cost to borrow a $100,000 Down Payment
$400,000 Mortgage
= $500,000 Investment Property

15 Years Of Ownership
4% Annual Appreciation
= $900,471 after 15 years

Mortgage remaining after 15 years = $246,189
Equity created in property $654,282 – $100,000 Initial down payment

$554,282 = Total Equity After 15 years

$98,436 vs $554,282 (560% Higher Return on Investment)

But What if…
Real Estate only appreciated 2% instead of 4%?
Mutual Funds/RRSP/RESP return was 8% instead of 4%?
= $138,415(Investments) vs. $326,795(Real Estate)
188% Higher Return on Investment

This shows why investing in real estate is a great option and can be very lucrative when done right.

If you would like to discuss how to invest in real estate further, schedule a meeting with me by clicking HERE

Excited to Start My Career as a Mortgage Agent

General Drew Hermiston 25 May

Beyond excited to be starting in this new role as a mortgage agent! After completing my degree in sport management back in December I made the active decision to pursue a career in financial services and have spent the past 3 months learning the business. I am grateful to have one of the best mortgage teams in the business supporting me and look forward to what the future holds for me in this career path. If you or anyone you know has any mortgage needs I am committed to ensuring you are provided with the right solutions for all of your financial needs.