Whether you are a first time home buyer or an experienced home owner, purchasing a home requires a good grasp on your financial situation.  Understanding the additional costs of purchasing and owning a home beyond the purchase price and monthly mortgage payments is also very important.  All of these factors should be considered in the context of your overall financial plan given your current financial resources as well as your personal and financial goals.  Evaluating your personal situation in the context of your financial plan is an important step in determining what the right purchase is for you.

The Home Buyers’ Plan (HBP) allows first time home buyers to withdraw funds up to $20,000 from their RRSPs in a calendar year to buy or build a qualifying home.  The amount withdrawn is considered a loan from the RRSP and is therefore not taxable.  This can be a great way to save for a down payment for your home purchase or build using the benefit of tax free growth of your savings within your RRSPs.  The amount withdrawn under a Home Buyer’s Plan must be repaid within 15 years and payments must start 60 days after the end of the second year following withdrawal of RRSP funds.  As a first time home buyer, whether you are just starting out saving for a down payment, or have existing RRSP savings that you can use, the Home Buyers’ Plan may be the right plan for you.

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