Down Payment Options

Using your RRSP as a Down Payment

First-time homebuyers are eligible to use up to $35,000 in RRSP savings per person ($70,000 for couples) for a down payment on a home. The withdrawal is not taxable as long as you repay it within a 15-year period.

Gifted down payment

Do you have a family member willing to help? A gifted down payment, from immediate family, is a great option. Those gifting will need to sign a gift letter, stating the exact amount of the gift, and that the gift does not need to be repaid. The letter will also include an address and phone number for the lender to call and verify the information. 

Borrowed down payment 

Borrowed down payments such as personal loans, lines of credit, credit cards, and equity may be accepted by some lenders. If you have great credit, this may be an option for you. Keep in mind, the repayment of this separate loan needs to be included in your debt to income ratios and will reduce your purchasing power. When using borrowed funds for an insured mortgage, there is a premium charged to the mortgage default insurance. 

Your own savings or investments.

Of course, you can use you own savings from your regular bank account or any investment account. Be aware of where you are keeping your savings and any penalties or tax implications you may incur when withdrawing the funds.