Mortgage Guide: Home Buyers’ Plan (HBP)

Mortgage Guide: Home Buyers’ Plan

If you’re a first time home buyer in the Windsor real estate market it is important to know that there may be an incentive to help you make that happen. When you start looking for houses for sale in Windsor or whatever other Greater Windsor Area you’d like to live in with your Windsor REALTOR®, you’ll want to know how much to spend based on your pre-approval. Part of that pre-approved mortgage will be what you can put down as your down payment. The more you can put down, the more Windsor homes that may become available to you based on your spending power.

In order to help make the down payment process easier, the Government of Canada has the Home Buyers’ Plan (HBP) available to Canadians. If you are eligible, the HBP allows a buyer to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP), tax-free, to use as a downpayment. It must be used on a qualifying home purchase or build and must be paid back within 15 years.

Sounds like a sweet deal right? Well if it is viable for you, it certainly is. It is important to consider two things however. First, can you make the repayments? If you can’t make them back into your RRSP this is not right for you. The costs of not making repayments can end up costing a lot more in income tax. The second thing is to consider the impact on your retirement. Remember this is coming from your RRSP, make sure there is minimal risk in pulling the money out. When that money is withdrawn, you will be losing out on all that growth.

The HBP is a great mortgage tool and helps first home buyers if they can afford to make the repayments as they do not need the retirement funds in the short term.. For more information on the Home Buyers’ Plan CLICK HERE. To see if you are eligible for the Home Buyers Plan CLICK HERE.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!