Raising the amount allowed to be borrowed from your RRSP’s savings account from 25,000 to 35,000 to be used as a home down payment is a “Plan” that one of the candidates for the prime minister’s office is looking to champion
So far this is only a “Plan”, but how interesting is that to you as a borrower?
How does contributing to your RRSP savings account helps you?
- Saving for your retirement
- Gaining generous dividends from your savings
- Tax shelter (Differing paying taxes until you reach retirement age)
- Borrow from your RRSP savings towards the down payment of your home
May I help you with your mortgage?
Tax sheltering works in the following way:
If an employed person makes 50,000 a year, he/she will be deducted about 8,000, (check your T4 at the end of the year) if that person is able to contribute 10,000, before the end of the year or March 1 or Feb 29 on leap years, then after filing taxes, the return for this contributions should be around 1,800+
(These values are not guaranteed to be accurate. For informational purposes only)
Repeat this operation for a couple of years more and you’ll have saved a substantial home down payment, and don’t forget that this are amounts per person, if you area couple, you can add to the equation the correspondent amounts of the second person.
Your RRSP’s contributions plus their gains can be borrowed towards the home down payment after they have been in your account for at least 90 days
Does the “Plan” motivates you to increase your RRP’s contributions with the intention of using them later as your down payment to purchase a home?
Below you’ll find a quick poll that will help us all get a more general perspective, the more people participates, the greater perspective of the choice we all may have, so feel free to share this link with those you know