Retirement Savings for down payments
Canada Revenue Agency’s Home Buyers Plan lets qualifying home buyers use up to $20,000 of their Registered Retirement Savings Plan to buy a home. Couples can use up to $40,000. The home must be a principal residence, the home buyers must not have owned a home within the past five years and the loan must be repaid with 15 years. Disabled home buyers upgrading to a more accessible home also qualify as do relatives helping disabled home buyers. Home buyers who have already used the plan and have fully repaid their RRSP may be eligible to use the plan a second time. Talk to your lender for more information.
Mortgage Brokers notes:
The most efficient way to pay off this type of investment vehicle is to pay off the recommended minimum payments and not exceed (balloon) those.
This recommended re-payment plan is to repay at a rate of 1/15th/yr.
Ex: $20,000 ÷ 15yrs = $1,333.33/yr annual payment.
Do to the new FINTRAC regulations the funds used must be in the RRSP account for a minimum of 90 days.
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