With February in sight this is a great time to talk about the Federal Government’s Home Buyers’ Plan (although this year you have until March 2, 2020 to purchase RRSP’s for 2019– if that’s your plan). I have had many clients, over the years, use this program to make their home ownership dreams a reality!

With this program, you can use up to $35,000 of your RRSP savings ($70,000 for a couple) to help finance your down payment on your first home.

To qualify, the RRSP funds you’re using must be on deposit for at least 90 days. In order to access your RRSP’s, you must have entered into a written agreement to purchase a home (a pre-approval from your mortgage lender does not qualify).  You must be intending to live in the home, within one year of purchase, so you cannot use this for a rental property purchase.  You must qualify as a first-time home buyer, which means that neither you nor your spouse have owned a home, as your principal place of residence, within the last four years.

One of the benefits is that it is not taxable if you repay it within a 15-year period. The payback amount is at least one-fifteenth a year of the amount you withdrew from your RRSP. So, make sure you set up an automatic monthly, bi-weekly or even weekly contribution to your RRSP, to ensure you do not miss any repayments!

It’s very important to your overall plan that both the pros and cons of this strategy be reviewed. There are several questions you should be asking yourself about this strategy:

  • Will you repay the requirement amount each year?
  • Is it the right time to cash out your RRSP (i.e., this depends on the investments and rate of return you are getting on your current investment)?
  • Is it worth forgoing the future tax sheltered growth potential of your RRSP in favour of reducing the mortgage amount (including default insurance premiums, total interest costs, etc.)


Still not sure if you qualify or if this a good option for you?  Seek advice from a financial planner, your mortgage lender or the lawyer you are using to purchase your home to confirm.  Happy house hunting!