How to Maximize your RRSP'S when buying a house

We have a Guest Blogger this week...Sarah Astles from The Place to Mortgage :) Check out her very knowledgeable post about how to use your RRSP's as your down payment on a house:

I have found in my travels as a Mortgage Broker many people are confused on when and how they can
use their RRSP’s for a down payment on their first home. In today's post we will explain when and how you can use your RRSP’s.

With this program you are considered a First Time Home Buyer if during the four calendar years prior to
the year of the withdrawal, neither you or your spouse owned a home that either of you have resided.
Loan Repayment must be made over a period of 15 years, or less, and must begin in the second year
following the withdrawal.

If you make a deposit to the RRSP account you are planning to use whether it is the initial deposit or
adding to, you must wait 90 days in order to be able to withdrawal the RRSP for the down payment. For
example if you had a $10,000 RRSP from years ago and you deposit $3,000 in Feb 1st, you need to wait
until May 1st to make the withdrawal for a purchase in order not to have any tax implications.
The max withdrawal per person under this program is $25,000, if each you and your spouse had the
RRSP’s to remove you could remove up to $50 000 total, with a max of $25,000 each if purchasing the
property jointly.

The tax year in which you make the withdrawal you must file a T1036 form to report the withdrawal.
For the lenders you will need to show 90 days worth of bank statements for the RRSP account and show
the funds being transferred to an account making them accessible for the down payment, as some
investments are locked in and require a penalty to be paid in order to make a withdrawal.

If you are thinking about using your RRSP’s for a down payment in the next 12 months, feel free to give myself and Roxann a call and we can walk you through the process of your first purchase.



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