When you pay back a Home Buyers' Plan (HBP) withdrawal, the money goes back into your Registered Retirement Savings Plan (RRSP). It is essentially a repayment of a loan to yourself, which must be re-contributed over a maximum of 15 years to avoid having the amount added to your taxable income.
You have up to 15 years to repay what you owe, and you'll need to pay back at least 1/15 of the total amount you've withdrawn per year. If you don't, you'll need to include the rest in your annual income.
The first-time homebuyer credit was available to first-time homebuyers from 2008 through 2010. While this tax credit is no longer available, you might be surprised to hear you could still be repaying the credit.
The CalHFA VA program is a VA-insured loan featuring a CalHFA fixed interest rate first mortgage. This loan is a 30-year fixed interest rate first mortgage. The CalHFA USDA Program is a USDA Guaranteed first mortgage loan program, which can be combined with the MyHome Assistance Program (MyHome).
HBP Cons:
The "240,000 rule" (or $1,000-a-month rule) is a retirement guideline suggesting you need $240,000 saved for every $1,000 of monthly income you want in retirement, based on a 5% annual withdrawal rate ($240,000 x 0.05 = $12,000/year or $1,000/month). It's a simple way to estimate savings needs, but it doesn't account for inflation, taxes, market volatility, or other income sources like Social Security, making it a starting point, not a complete plan.
To make withdrawals from your RRSPs under the HBP, fill out Form T1036, Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP. You have to fill out a separate form for each withdrawal you make. After filling out Area 1 of Form T1036, give it to your RRSP issuer. The RRSP issuer must fill out Area 2.
You might be an ideal candidate for the HBP if: You have substantial RRSP savings to withdraw from. Your job and income are stable enough to handle 15 years of repayments. You're looking to enter the housing market sooner rather than later.
A recent tax law ("One Big Beautiful Bill") introduced a new $6,000 bonus deduction for Americans aged 65 and older, available for tax years 2025-2028, reducing taxable income, not the tax itself, with income phase-outs starting at $75,000 MAGI for singles and $150,000 for joint filers. This deduction adds to existing standard deductions, provides up to $12,000 for couples, and requires a Social Security number and filing status other than Married Filing Separately.
Tax Credit in General
For first time homebuyers, there is a refundable credit equal to 10 percent of the purchase price up to a maximum of $8,000 ($4,000 if married filing separately).
A special property tax deduction in California is available for homeowners on their primary residence. Homeowners need to file a form with the tax assessor in their county to receive a $7,000 reduction in taxable value for the home.
If you stop using the home as your main home, you must generally repay the entire remaining amount of the credit for the year the home is no longer your main home.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
Red flags when buying a house include structural issues (foundation cracks, sloping floors), water problems (stains, musty smells, basement flooding signs, poor drainage), sloppy renovations (fresh paint covering damage, crooked finishes, DIY work), bad maintenance (old roof, deferred upkeep), and listing/market oddities (long time on market, multiple price drops, little info). Always get a professional inspection to uncover hidden issues with major systems like electrical, plumbing, HVAC, and roofing before buying.
Most mortgage lenders recommend using no more than 28% of your monthly gross income on a mortgage payment. In addition to that, many lenders also recommend that you spend no more than 36% of your monthly gross income on all your debt payments combined, including your monthly mortgage payment and other house costs.
To buy a house, you generally need a credit score of at least 620 for a conventional loan, though government-backed loans like FHA allow scores as low as 500-580, and higher scores (740+) get you the best interest rates. Requirements depend on the lender and loan type, with FHA loans being more lenient for lower scores (500-580), while USDA loans often need 640+, and VA loans usually look for 620+.
Top 3 Mistakes First-Time Homebuyers Make (And How to Avoid Them)
You can usually only take money out of a workplace or personal pension once you're 55 or older (rising to 57 from April 2028). You can't start claiming your State Pension before you reach State Pension age. That's 66 right now, rising to 67 and then finally to 68 by 2028.