Rsp question

[to0n]

Do I have to pay back my rsp if I take out for down payment on a mortgage?

[Carl Johnson]

Home Buyer's Plan (HBP)

While the original purpose of RRSPs was to help Canadians save for retirement, it is possible to use RRSP funds to help purchase one's first home under what is known as the Home Buyer's Plan. Canadians can borrow, tax-free, up to $20,000 from their RRSP (and another $20,000 from a spousal RRSP) towards buying their residence. This loan has to be repaid within 15 years after two years of grace. Contrary to popular belief, this plan can be used more than once per lifetime, as long as the borrower did not own a residence in the previous five years, and has fully repaid any previous loans under this plan. In the January 27, 2009 Federal Budget, the Minister of Finance announced that the $20,000 limit will be increased to $25,000.

Got this straight from wikipedia

[tiger_handheld]

if u take out 20k. it works out to 111/mo in payback.

[adrnlnrush00]

Originally Posted by to0n

Do I have to pay back my rsp if I take out for down payment on a mortgage?

There are other conditions to using the HBP as well. For example, you must occupy this home as your principal residence. For further clarity, you cannot take out money from your RRSP to purchase an investment property.

You must take all that you need from the RRSP within the same calendar year (I think).

You do not have to take the funds out of the RRSP before you purchase your home. For example, you may take the funds out of the RRSP after you've already purchased your home... but... you must not have occupied this home for more than 30 days.

For detailed information, just search HBP under the CRA's website. They have a guidebook that's about 15 pages and provides you with all the conditions in plain English (very few complicate legal terms).



Jimmy