For new home buyers that are searching for down payment options, they may not need to look too far. The First Time Home Buyers’ Plan (HBP) is a government program that uses funds from an RRSP to purchase or build a home. A buyer can withdraw up to $25,000 in a calendar year to put towards their own home, or for a related person with a disability. For those without an RRSP, or the money to invest in one, there are options available. Many financial institutions will lend funds, with interest only payments, to borrowers in order to contribute to an RRSP.

• Listing price of home: $250,000
• Borrower income: $50,000
• January 20 → client obtains $10,000 RRSP loan
• January 20 → client puts $10,000 into RRSP for 90 days
• March 1 → client files taxes with $10,000 RRSP contribution
• April 1 → client receives $3,115 tax reimbursement and applies directly to loan
• April 20 → client withdraws RRSP funds for home down payment