I talking to a friend recently who financial dream was to purchase a house. I was sharing a way they could significantly increase their down payment in 90 days with a government home buyers program. This is the home buyers RRSP program. This is a government program that currently allows you to take out up to $25,000 from your RRSP to purchase a house. Essentially this allows you to flow your down payment through your RRSP providing a tax deduct that could result in increasing your tax return by up to approximately 11,000 dollars depending on your marginal tax rate. For example, a person with an income of $60,000 may generate a return around $7,000. Thus in turn using this program that person could boost their $25,000 downpayment to $33,000 in a very short time.
This could be beneficial in allowing you to increase your downpayment which in turn may reduce or remove the CMHC insurance cost a high ratio mortgage or simply reduce your monthly payments as your loan would be less.
This is the best time to start your RRSP to take advantage of this plan. You can start this plan with your RRSP with small monthly payments. In fact, your tax refund may be greater with smaller monthly payments over time than as a lump sum.
It is important to note that there are a number of government rules to make sure you follow when implementing this plan. Please feel free comment below or contact me for more information on the governments RRSP Home Buyer Plan.
E. & O.E.