Home Buyer's Plan vs. RRSP Mortgages
Q. I already know how to use my RRSP money with the Home Buyer's Plan to buy my own property. Why do I need to know about RRSP mortgages and your RRSP Creative Financing seminar?
A. There are actually 3 different ways to use RRSP money to invest in property. Each one is used in a different way:
- Home Buyer's Plan - you borrow from your own RRSP to buy your first home, withdrawals must be repaid over no more than 15 years
- Non-Arms Length Mortgage - you borrow from your own RRSP or that of a family member, money is borrowed in the form of a mortgage and must be insured by CMHC, you must qualify as with a normal mortgage (CMHC's guidelines)
- Arms Length Mortgage - you borrow from someone else's RRSP (must be unrelated), money is borrowed in the form of a mortgage, no insurance or qualification is required
As you can see, each method is quite different. We recommend everyone take advantage of the Home Buyer's Plan to help buy their first home - it's a great program.
An Arms Length Mortgage is the most flexible way to use RRSP money, and we teach exactly how to use these types of mortgages in our seminars. Visit our Events section for more details
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Paul Blacquiere and Joanne Beehler are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy.
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