For many first-time homebuyers, saving what’s required for a down payment can seem overwhelming. However, sometimes saving for a down payment is as simple as managing your budget differently.
You can start saving for your down payment:
- By setting aside money each month just as you would a regular mortgage payment
- By opening a RRSP Regular Investment Plan™ to help you save tax free
- With a cash gift from a parent or relative
Let CIBC help you with a strategy to reach your goal of buying your first home sooner.
Using your RRSPs to buy a home
If you qualify as a first-time homebuyer, you may be eligible for the government’s Home Buyers’ Plan (HBP). This allows you and your spouse or partner to withdraw up to $25,000 each from your Registered Retirement Saving Plans (RRSPs) to add to your down payment or to cover purchase-related costs.
Best of all, you don’t have to pay income tax on the funds, as long as you repay the total amount to your RRSP over the next 15 years. The repayment period starts the second year following the year you made your withdrawals. If the full $25,000 is withdrawn, the minimum annual repayment would be $1,666.
For more information on the Home Buyers’ Plan, please visit the Canada Revenue Agency website.