Quote:
Originally Posted by mr_chin
Reviving old thread.
Would it be wise to take out a big loan on low interest to maximize my contribution and then pay off the loan as fast as possible?
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All depends on how much you plan on borrowing and at what interest rate.
Every person is going to be different but generally speaking, you get back $0.30 on the dollar that you put into RRSP's.
So if you borrow $5K to buy RRSP's, expect a tax return around $1500.
So now you owe $3500 at whatever interest rate you borrow at.
My own personal belief is that if you have to borrow money to buy RRSP's, then you shouldn't do it.
You are taking on debt to put money away into something that is pretty locked in or has high cost to withdraw from.
Like we have all said, you will not lose the contribution room so why borrow for the same of defering taxes. Save the room till you make more money.