Understanding the Home Buyer’s Plan for the Region of Waterloo [Updated for 2025]

Buying a home has never been easy, but it feels even more like a high-stakes game today. Prices are up, competition is fierce, and the challenge can seem overwhelming for first-time buyers. But there’s good news: Canada’s Home Buyer’s Plan (HBP) just got better.

The HBP lets eligible buyers withdraw money from their Registered Retirement Savings Plan (RRSP) tax-free to buy or build a home. As of 2024, the federal government increased the withdrawal limit from $35,000 to $60,000 per individual—which means a couple can now access up to $120,000 combined. More importantly, homebuyers now have a five-year grace period before they need to start repaying the amount. That’s five extra years to focus on mortgage payments without added financial strain.

How the Home Buyer’s Plan Works

The idea behind the HBP is simple: tap into your savings to buy a home, then pay yourself back over time—without tax penalties. Here’s what you need to know:

  • Eligibility: You must be a first-time homebuyer (or haven’t owned a home in the last four years) and plan to live in the home as your primary residence.
  • Repayment: You now have five years before repayment starts, and once it does, you have 15 years to pay back the full amount. You can pay more in some years and less in others—flexibility that makes a difference.
  • Usage Deadline: Funds must be used within 30 days of taking ownership.

Using the HBP strategically, buyers can reduce their reliance on high-interest loans and make homeownership more affordable.

Chelsea Kitts, Mortgage Agent at The Mortgage Agent, advises first-time buyers to plan ahead: “If you are looking at buying this year, do this before March 3, 2025, to create more down payment. Kitchener-Waterloo still has some affordable inventory.” She continues: “Max out your allowable contribution (check your 2024 tax assessment) up to a maximum of $60,000. Depending on your tax bracket, you will receive a large refund early this year that you can apply toward the down payment, which may help you qualify.”

Chelsea also highlights an alternative option: “There are also RRSP short-term loans that can be repaid before the closing of the new mortgage. Ensure you confirm with Canada Revenue Agency (CRA) – Canada.ca – your allowable maximum.”

Waterloo’s Housing Market & Local Programs

The Waterloo region is one of Canada’s fastest-growing real estate markets. The region’s booming tech sector, strong employment opportunities, and proximity to Toronto keep demand high. The average home price in 2024 hovered around $750,000, which makes stacking federal and local programs crucial.

Affordable Home Ownership Program

Waterloo Region runs a program designed to help renters transition into homeownership. It offers a forgivable loan covering 5% of the down payment, which can significantly ease financial pressure when combined with the HBP.

To qualify:

  • Household income must be $109,000 or less.
  • The home purchase price must be $600,000 or less.
  • Applicants must have lived in the region for at least a year and be renting at the time of application.
  • If the home is sold before 20 years, the buyer repays the loan plus 5% of any profit.

First-Time Home Buyer Incentive

This federal initiative provides a shared equity mortgage, meaning the government contributes 5% for resale homes or 10% for new builds, lowering mortgage costs. Upon resale, the government shares in the home’s appreciation or depreciation.

The Real-World Impact: A Buyer’s Story

Take Jane and John from Kitchener. They had been renting for years, watching prices climb, and feeling like homeownership was slipping out of reach. By combining the HBP, the Affordable Home Ownership Program, and the First-Time Home Buyer Incentive, they bought a $650,000 home while keeping their mortgage payments lower than expected.

“The HBP let us use savings we otherwise couldn’t touch,” says Jane. “Without the local down payment support, we probably would have waited another five years to buy.”

Smart Moves for Home Buyers in 2025

With interest rates and home prices fluctuating, the key is strategy. Here’s how to position yourself:

  1. Check Your RRSP Contributions – Make sure you have enough savings to maximize the HBP withdrawal.
  2. Look Into Local Support – Programs like the Affordable Home Ownership Program can bridge the gap.
  3. Get Pre-Approved for a Mortgage – A strong pre-approval makes all the difference in a competitive market.
  4. Plan Your Repayments – Use the five-year grace period wisely.
  5. Consult a Mortgage Expert – A good broker can help navigate the complexities and save thousands.

One solid option for first-time buyers in the Waterloo region is The Mortgage Centre KW. With a deep understanding of local programs and access to a wide range of lenders, they help buyers find the right mortgage strategy—without the guesswork.

Final Thoughts

The Home Buyer’s Plan is a powerful tool, but leveraging every available program makes the real difference in a competitive market like Waterloo. Start planning early, understand your options, and work with experts who know the terrain. If you play it right, your first home might be closer than you think.

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