The Home Buyers’ Plan (HBP) allows Canadians to withdraw up to $25,000 from their Registered Retirement Savings Plan (RRSP) to buy or build a home. To qualify, you need to ensure that your RRSP contributions remain in the RRSP for at least 90 days before you can withdraw them, and they must be repaid within 15 years. This is a program of the federal government, so you can confirm your eligibility and conditions for participating by contacting CRA or by going to the Canada Revenue Agency website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html?=slnk .
A UNIQUE AND VITAL PROGRAM
The HBP has made homeownership a more affordable reality for over two million Canadians. It allows Canadian families to save concurrently for retirement and a home, eliminating the need to choose one over the other or greatly dilute both goals. It is an essential and unique tool in a home buyer’s toolkit.
The HBP provides a gateway to financial security through homeownership. In fact, average household net worth was found to be $11,000 for those who rent compared to $375,000 for homeowners with mortgages and $764,000 for mortgage-free homeowners.
Furthermore, the HBP effectively serves as a repayable zero-interest self-loan, which can reduce or eliminate the need for costly mortgage insurance and reduce the amount of interest paid to lenders.