Don’t let the downpayment be the barrier to your homeownership dreams. There are many mortgage products that allow you to achieve homeownership with little or no down payment at all. Be sure you speak to your lender about all your downpayment options or review the What Products are available to me section.
Beyond mortgage products, there are other sources to consider for your downpayment needs. You can use your savings, or a gift from a parent or relative. Or did you know Registered Retirement Savings Plans (RRSPs) can be used towards the purchase of a first home?
The Federal Government of Canada has a First-Time Homebuyers’ Plan (HBP) that allows you to use money in your RRSP to purchase your first home. For example, the current HBP lets first-time buyers withdraw up to $25,000 from their RRSPs to buy or build a home. RRSPs are a great way to secure your financial future while enjoying tax benefits today.
Additional considerations when using your RRSP:
- The amount you withdraw must be repaid within 15 years, beginning in the third year after the withdrawal.
- You can create an RRSP with borrowed money and use the tax refund as a down payment.
- You can establish an RRSP with borrowed money and withdraw the money as a down payment through HBP.
You can set up an RRSP through your bank or other financial institutions like credit unions or insurance companies. Visit Canada Revenue Agency for more information on setting up an RRSP and the Homebuyers’ Plan.