The First Home Savings Account Plan for Waterloo Region Residents [2025 Update]

Buying a home in the Waterloo Region isn’t what it used to be. Prices are higher, competition is tougher, and saving enough for a down payment feels like a moving target. The First Home Savings Account (FHSA) was introduced to help. However, most people still don’t know how to use it properly because they either aren’t aware of its tax benefits, don’t understand how to invest within it, or mistakenly assume it works like a regular savings account.

It’s a federal program that applies across Canada, but how useful is it if you’re trying to buy in Kitchener, Waterloo, or Cambridge? And how do you make the most of it?

What the FHSA Actually Is

The FHSA is a tax-free savings account for first-time homebuyers. You can contribute up to $8,000 annually, with a lifetime cap of $40,000. Contributions reduce your taxable income, just like an RRSP. When you withdraw the money for a qualifying home purchase, you don’t pay taxes on it.

The key difference from an RRSP is that you don’t have to pay it back, making it a more attractive option for those who don’t want the burden of repayment while managing mortgage costs. Unlike the Home Buyers’ Plan (HBP), which lets you borrow from your RRSP but requires repayment, the FHSA is money you keep tax-free.

For anyone planning to buy a home in Waterloo Region, this means a structured, tax-efficient way to save—especially given how down payments are the biggest hurdle for most first-time buyers.

The Housing Market in the Waterloo Region

Waterloo Region’s real estate market is more affordable than Toronto’s but still expensive by national standards. The average home price in Kitchener-Waterloo was around $750,000 at the start of 2025. That means a minimum down payment of at least $50,000 for many buyers.

With an FHSA, you could reach that goal faster. Maximizing contributions for five years ($8,000 annually) is $40,000, not including investment growth. Depending on your tax bracket, the deductions could also net you several thousand dollars in refunds over those years.

How to Make the FHSA Work for You

1. Start Now, Even If You’re Not Ready to Buy

The biggest advantage of the FHSA is tax-free investment growth. The sooner you contribute, the more time your money has to compound. Even if you don’t plan to buy for five or six years, starting now will make a big difference.

2. Invest, Don’t Just Save

An FHSA isn’t just a savings account—it’s an investment account, meaning your savings can grow and come with market risks. Investments like stocks and ETFs can fluctuate, so balancing risk tolerance with financial goals is important. You can hold stocks, ETFs, mutual funds, and GICs. With housing prices rising, parking your money in a low-interest savings account means falling behind. If you’re risk-averse, consider a mix of conservative investments like index funds or bonds.

3. Combine It with Other Programs

The FHSA is best used alongside other incentives:

• Home Buyers’ Plan (HBP): You can withdraw up to $60,000 from your RRSP tax-free to buy a home. That’s on top of your FHSA funds.
• First-Time Home Buyer Incentive: This federal program offers a shared-equity mortgage with the government, lowering monthly payments.
• Land Transfer Tax Rebates: Ontario offers first-time buyers a rebate of up to $4,000 on land transfer tax.

Stacking these programs allows first-time buyers in Waterloo Region to access over $100,000 in tax-free funds.

4. Work with a Mortgage Professional

You don’t have to do mortgage financing alone. The Mortgage Centre is centered on you. Our experts can provide guidance on available mortgage options and ensure you find a mortgage that aligns with your financial goals. With access to various Canadian financial institutions, we can help you compare rates and mortgage features, potentially saving you both time and money over the long term.

Local Insights

Financial advisors in the Waterloo Region see many young professionals and tech workers struggling to save while paying high rent. But according to mortgage experts, many first-time buyers aren’t using the First Home Savings Account (FHSA) to its full potential.

“If you’re a first-time buyer and NOT using an FHSA, you’re leaving free money on the table,” says our expert at The Mortgage Centre. “This account lets you invest your down payment tax-free—think stocks, ETFs, GICs—so your savings actually grow instead of sitting stagnant. Plus, your contributions lower your taxable income. Even if you’re not buying soon, open one now to start building contribution room.”

Homebuyers also underestimate how much taxes can eat into their income. The FHSA helps by lowering taxable income today and boosting savings for tomorrow.

They add, “If you max out your FHSA at $40K and invest it well over a few years, you could easily have $50K+ saved up tax-free by the time you’re ready to buy. And if you never buy? No worries—you can roll it into your RRSP tax-free. The sooner you start, the more you can take advantage of this.”

By taking advantage of the FHSA now, first-time buyers can set themselves up for a stronger financial position when the time comes to purchase a home.

The Real Benefit: Beating Inflation

Real estate in Waterloo Region isn’t getting cheaper. The FHSA won’t magically make homes affordable, but it does make saving more efficient. It’s a way to fight back against rising costs and build a tax-advantaged war chest for when you’re ready to buy.

The best time to start? Yesterday. The second best time? Today.