Short answer
You can contribute, but the 89-day rule may restrict the deduction for RRSP contributions made shortly before an HBP withdrawal. A rushed deposit-and-withdrawal strategy can lose the expected tax benefit.
The client’s real concern
A buyer deposits borrowed or saved money into an RRSP weeks before closing, expects a full deduction and immediately withdraws it under the HBP.
What the official rule says
CRA says special rules can limit the deduction of contributions made during the 89-day period before the HBP withdrawal. The result depends partly on the value left in that RRSP after the withdrawal.
What this does not guarantee
This is not a lender qualification rule and it is not simply a universal “money must sit for 90 days” rule. It is a tax-deduction calculation; the lender separately reviews source, ownership and whether funds are borrowed.
A practical Ontario example
Illustration only: A buyer contributes $20,000 to an empty RRSP and withdraws the entire balance under the HBP 30 days later. The expected RRSP deduction may be restricted even if the HBP withdrawal itself is processed.
What I would check before relying on the money
Have an accountant or tax professional model the 89-day calculation before contributing. Give the broker the full bank-to-RRSP trail and disclose any borrowed source so the mortgage structure is not built on a tax refund that may not arrive.
- Which program are you using: FHSA, HBP, both, or another source?
- Who owns the account and independently meets that program’s definition?
- When were funds contributed, and when must they be withdrawn?
- Will the full bank, RRSP or FHSA trail satisfy the lender and lawyer?
- What cash remains for the deposit, adjustments, tax, legal costs and emergencies?
Rajiv’s broker perspective
Tax eligibility and mortgage approval are two separate tests. CRA determines whether the withdrawal or credit qualifies under tax law. The lender, mortgage insurer where applicable, and lawyer separately examine ownership, source of funds, borrowed down payment, timing and affordability. I would build one funds-to-close schedule first, then compare suitable A-lender, alternative/B, MIC or private options only if the complete mortgage facts require them. A tax benefit should support the plan—not hide a cash shortfall.
Related: First-Time Buyer Rule Hub · Mortgage Knowledge Centre · Updates & Rules Centre
Will your down payment be ready when the offer becomes firm?
Send Rajiv the purchase timeline, account types, contribution dates, expected withdrawals and available closing cash. He can prepare a practical funds-to-close review and identify questions that need your accountant or lawyer before you commit.