More Canadians are taking advantage of FHSA — over 50% planning to use it to help purchase their first home

FHSA as a tool for home buying

FHSA contributions are tax-deductible, earnings are tax-sheltered, and withdrawals are tax-free when used towards qualified first-time home purchases. First time home buyers can contribute up to $8,000 a year and that yearly contribution limit can be carried forward, with a lifetime contribution limit of $40,000.

The FHSA knowledge gap is narrowing, with two fifths (40%) of Canadians indicating they have at least some knowledge of the account, up from 31% from last year.

As well, nearly half (48%) of Gen Z are knowledgeable about the FHSA's features and benefits – the highest among any age group.

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Impact of relaxed mortgage rules

First-time homebuyers were also asked how the new relaxed mortgage rules would influence their ability to purchase a home. Over a third (36%) responded that they expect the new rules will make it easier to make a purchase. The new rules allow for amortizations of up to 30 years for first-time homebuyers and on any new construction purchase, as well as an increase in the maximum amount for an insured mortgage rising to $1.5 million from $1 million.

Even though mortgage rates have generally fallen over the past year, just 36% of prospective homebuyers believe the changes in mortgage rates will make it more likely that they will purchase a home in the next two years. And 39% have concerns that changes in mortgage rates will make it less likely they will be able to purchase a home.

Survey methodology

This study was conducted by Pollara with an online sample of 1,500 adult Canadians aged 18 years and above from November 8 to 18.