Purchase a home with 0% down payment in Canada? Is this legal?!

As a first-time buyer, saving for a down payment can feel challenging with costs so high.

But there’s a clever way to borrow from yourself with a little help from your RRSPs. Here’s how it works.

You take out a short-term RRSP loan, deposit it into your RRSP, and leave it there for at least 90 days. But make sure this loan has the lowest possible monthly payment so it has the least impact on your mortgage qualifying ratios.

After 90 days, withdraw up to $60,000 tax-free using the Home Buyers’ Plan. You could even get a tax refund.

It’s one of the smartest ways to boost your down payment and buy sooner, but it takes some planning.

So, talk to a mortgage expert familiar with this strategy before getting started.

Video Highlights:

The Down Payment Challenge for First-Time Buyers
An overview of why saving for a down payment feels increasingly difficult as housing costs continue to rise.

Borrowing From Yourself With RRSPs

An explanation of how first-time buyers can use their own RRSPs—rather than traditional borrowing—to boost their down payment.

How an RRSP Loan Works
A step-by-step look at using a short-term RRSP loan, depositing it into your RRSP, and meeting the required holding period.

Why the 90-Day Rule Matters
Highlights the importance of leaving funds in your RRSP for at least 90 days to qualify for the Home Buyers’ Plan.

Managing Mortgage Qualification Ratios
Emphasizes choosing a loan with the lowest possible monthly payment to minimize its impact on mortgage affordability.

Using the Home Buyers’ Plan
Explains how first-time buyers can withdraw up to $60,000 tax-free to put toward a home purchase.

Potential Tax Refund Benefits
Shows how contributing to your RRSP may also generate a tax refund, further strengthening your financial position.

The Importance of Expert Guidance
Reinforces that this strategy requires careful planning and professional advice to avoid costly mistakes.

Takeaways

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  • Saving for a down payment as a first-time buyer can be accelerated with smart RRSP planning.
  • An RRSP loan allows buyers to temporarily borrow from themselves rather than relying on high-interest debt.
  • The 90-day holding requirement is critical to accessing funds through the Home Buyers’ Plan.
  • Choosing a low-payment RRSP loan helps protect mortgage qualification ratios.
  • First-time buyers can withdraw up to $60,000 tax-free using the Home Buyers’ Plan.
  • RRSP contributions may result in a tax refund, further increasing buying power.
  • This strategy can help buyers purchase sooner but requires proper timing and structure.
  • Consulting a mortgage expert familiar with RRSP strategies is essential before proceeding.
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