If you are a First Time Home Buyer, you can use your rrsps through the Home Buyer's Plan, as a tax-free withdrawal and borrow up to $25,000 per person, if eligible. How can you know if you are eligible? Keep reading.
You are eligible if:
You are a first time home buyer OR haven't owned a home in the last four years
You are a Canadian citizen or Permanent Resident
You have written confirmation of a home that is new or under construction, that you've purchased.
You plan to reside in the home for a minimum of 1 year.
You don't have any previous balances owing under the Home Buyer's Plan.
With The Home Buyer's Plan, you receive a 2 year grace period of no payments required. After two years, you are given 15 years to repay the loan.
For example, if you withdrew a total of $25,000, each year you would be required to pay $1,667 ($25,000 ÷ 15)
It's Important To Remember
Your RRSP must be active for 90 days before you can withdraw it.
Your RRSP amount can also be used for other home buying expenses such as closing costs.