The Home Buyers' Plan (HBP) is a Canadian Government program that allows you to withdraw up to $25,000 from your RRSP (if you have one) to help you buy or build a home. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years starting two years after withdrawal to avoid tax. Application in a Purchase or New Build: The purchase or build must be a qualifying home. Visit here for more details.
The Federal Government also has a First Time Home Buyers' Tax Credit (HBTC), which can increase your income tax refund (or decrease your tax bill!), though - unfortunately - it doesn't help out with your down payment. Learn more here
CMHC (Canadian Mortgage and Housing Corporation) and Genworth Financial, as insurers to most of Canada's mortgage lenders, have made it easier to come up with your down payment for traditional mortgage financing. Here are your choices:
Provincially, there may be additional programs that you can research here.
As licensed professional mortgage brokers, we know exactly what it takes to qualify you for a mortgage and we do more than just get you a great mortgage at a great rate, we will show you the way, too.
As you may be aware, a vendor or seller cannot provide you with any form of your down payment to purchase their property. A lender would simply reduce the purchase price by the same amount, leaving you without a down payment. However, a vendor may permit you to live in their home until you can accumulate your own down payment sufficient to buy them out, hence the term Vendor Assistance Program.
Buyers that cannot currently qualify for a mortgage, whether insufficient down payment or other qualifying factor, might consider an equitable lease-purchase (rent-to-own) program as a means of assistance to acquire a property. Sellers will often provide this sort of assistance to encourage a buyer to purchase their property over another, so it helps them too.
Buyers are cautioned that rent-to-own needs to be viewed as a stepping stone to a mortgage, not a replacement. Buyers that fail to understand this point and fail to implement a specific plan toward mortgage qualification are often disappointed in the outcome.
If you are interested in a rent-to-own, we can assist you on how to negotiate this transaction with the seller and to document it correctly to dramatically improve your odds of succeeding with the strategy. Learn more.
The HBP rules require that the property title transfer to your name, which occurs only when you arrange your own mortgage. Hence, if you are considering using RRSP funds for your rent-to-own down payment, you MUST complete the purchase transaction before October 1 of the year after the year of the withdrawal to avoid a nasty tax bill. This means you'd have a window of between 9 and 21 months to complete your purchase depending when you withdraw. For example: If you withdrew RRSP money on on Jan 1st, 2015 you'd have to September 30th, 2016 (21 months later) to complete purchase. If you withdrew on December 31st, 2014, you'd have until September 30th, 2015 (9 months later) to complete the purchase.