Buying a home can get expensive. After all, a home is a large purchase, and if you want to avoid hassles and difficulties, you need to come up with a down payment of at least 20%. While some Canadian lenders have been accepting less, most home-buyers are better served by coming up with a large down payment.
But how do you come up with that down payment? With home prices still rising in many areas, coming up with 20% can seem insurmountable. That’s a large chunk of capital. The answer to this difficulty might be the Home Buyers Plan.
The Home Buyers Plan also known as HBP is a program that allows you to withdraw from your RRSP. You can withdraw up to $25,000 per year to buy or build a home. In order to take advantage of this you must be considered a first-time home-buyer and intend to occupy the home as your principal place of residence.
A certified financial planner can help you understand this type of withdrawal, it’s payback schedule, further details on how to qualify and if it’s the right option for you.