Using your RRSP for a downpayment through the HBP.

Diane Gogar • February 17, 2021

As the March 1st, 2021 RRSP deadline approaches for the 2020 tax season, if you have money saved for a downpayment but you’re not quite ready to buy a home, here’s a little strategy that might interest you. Did you know that you can use the money saved in an RRSP as a downpayment? It’s called the Home Buyers’ Plan, or HBP for short. 


Instead of keeping your downpayment tucked away in a savings account or TFSA, consider using your savings to purchase an RRSP before this year’s RRSP deadline. This will lower your taxable earnings for 2020 and trigger a (bigger) tax refund or lessen the amount of tax you have outstanding. You can then use the money saved towards your goal of homeownership. Admittedly, this won’t play a huge role in building a downpayment, but in times like these, every bit counts! 


So here are some of the criteria for using the Home Buyers’ Plan. 


You must be considered a first-time homebuyer to use the HBP. This means you have either never bought a home previously, or, in the last four-year period, you did not occupy a home that you or your current spouse or common-law partner owned.


You have 15 years to pay back the RRSP with payments starting in the second year after the withdrawal. While you won’t pay any tax on the money withdrawn from your RRSP for the downpayment, you will have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year, and your repayments will not count as new RRSP contributions as you’ve already received the tax break from those funds.


Funds have to be in your RRSP for at least 90 days to be eligible for use in the HBP. This is a rule not many people are aware of, but it’s pretty important. So if you decide to purchase an RRSP with your savings to be used as part of your downpayment for withdrawal through the HBP, you need to wait at least 90 days before buying a home to make everything work. If you decide to buy a home before the 90 days is up, the RRSP purchase can still be withdrawn, but it will negate the tax savings. 


You can access up to $35,000 ($70,00 per couple) from your RRSP account to be used as a downpayment through the HBP. The government increased the accessible amount in 2019. 


You can learn more about the Home Buyers' Plan by checking out the CRA website here. Or, if you’d like to discuss how the HBP could work for you and your personal financial situation, contact me anytime!

DIANE GOGAR
MORTGAGE PROFESSIONAL
CONTACT ME

Get Protection From A Pre-Approval

By Diane Gogar • March 5, 2025
There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market. Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without. Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel. One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range. So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed. Protect yourself with a mortgage pre-approval. A pre-approval does a few things It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend. It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau. It will outline the necessary supporting documentation required to get a mortgage so you can be prepared. It will secure a rate for 30 to 120 days, depending on your mortgage product. It will save your heart from the pain of falling in love with something you can’t afford. Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford. Get a pre-approval before you start shopping; your heart will thank you. If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Is It the Right Time to Refinance? 5 Signs You Should Consider It

By Diane Gogar • February 27, 2025
Refinancing your mortgage can be a smart financial move, but how do you know if it’s the right time? Whether you’re looking to lower your monthly payments, access home equity, or consolidate debt, refinancing can offer valuable benefits. Here are five key signs that it might be the right time to refinance your mortgage in Canada. 1. Interest Rates Have Dropped One of the most common reasons Canadians refinance is to secure a lower interest rate. Even a small decrease in your mortgage rate can lead to significant savings over time. If rates have dropped since you took out your mortgage, refinancing could help you reduce your monthly payments and save thousands in interest. ✅ Tip: Check with your mortgage broker to compare your current rate with today’s market rates. 2. Your Financial Situation Has Improved If your credit score has increased or your income has stabilized since you first got your mortgage, you might qualify for better loan terms. Lenders offer lower rates and better conditions to borrowers with strong financial profiles. ✅ Tip: If you’ve paid off debts, improved your credit score, or increased your savings, refinancing could work in your favour. 3. You Want to Consolidate High-Interest Debt Carrying high-interest debt from credit cards, personal loans, or lines of credit? Refinancing can help consolidate those debts into your mortgage at a much lower interest rate. This can make monthly payments more manageable and reduce the overall cost of borrowing. ✅ Tip: Make sure the savings from refinancing outweigh any prepayment penalties or fees. 4. You Need to Free Up Cash for a Major Expense Many Canadians refinance to access their home’s equity for renovations, education costs, or major life expenses. With home values rising in many areas, a refinance could help you tap into that value while still keeping manageable payments. ✅ Tip: Consider a home equity line of credit (HELOC) if you need flexible access to funds. 5. Your Mortgage Term is Ending, and You Want Better Terms If your mortgage is up for renewal, it’s the perfect time to explore refinancing options. Instead of simply accepting your lender’s renewal offer, compare rates and terms to see if you can get a better deal elsewhere. ✅ Tip: A mortgage broker can help you shop around and negotiate better terms on your behalf. Is Refinancing Right for You? Refinancing isn’t always the best move—there can be penalties for breaking your current mortgage, and not all savings are worth the switch. However, if you relate to any of the five signs above, it’s worth discussing your options with a mortgage professional. Thinking about refinancing? Let’s chat and find the best option for you!
Share by: