zombola
02-08-2016, 02:37 PM
CP | By Craig Wong, The Canadian Press
http://s.huffpost.com/images/v/thecanadianpress_logo.gif (http://www.thecanadianpress.com/)
OTTAWA — It's an option for many people buying their first home, but when deciding whether to tap into RRSPs, investment advisers urge caution.
"Whether or not it is a good idea to use the homebuyers withdrawal plan, I would say the answer is maybe," says Kelly Gares, an adviser with BlueShore Financial in West Vancouver, B.C.
"It does depend on your particular circumstances."
Under the homebuyers' plan, people can withdraw up to $25,000 from an RRSP to help buy or build a first home. They need to repay the amount to their RRSP and generally have up to 15 years to put the money back in their account.
In essence, people are borrowing money from themselves. And while they don't have to pay themselves any interest on the money they take out, they are giving up any gains they might have made on the money had it remained invested in an RRSP.
Mortgage payments aren't the only cost to buying a new home. There are maintenance costs, property taxes and utility bills. People need to be sure they'll also be able to repay their withdrawal within the allowed time as well as continue saving for retirement.
http://s.huffpost.com/images/v/thecanadianpress_logo.gif (http://www.thecanadianpress.com/)
OTTAWA — It's an option for many people buying their first home, but when deciding whether to tap into RRSPs, investment advisers urge caution.
"Whether or not it is a good idea to use the homebuyers withdrawal plan, I would say the answer is maybe," says Kelly Gares, an adviser with BlueShore Financial in West Vancouver, B.C.
"It does depend on your particular circumstances."
Under the homebuyers' plan, people can withdraw up to $25,000 from an RRSP to help buy or build a first home. They need to repay the amount to their RRSP and generally have up to 15 years to put the money back in their account.
In essence, people are borrowing money from themselves. And while they don't have to pay themselves any interest on the money they take out, they are giving up any gains they might have made on the money had it remained invested in an RRSP.
Mortgage payments aren't the only cost to buying a new home. There are maintenance costs, property taxes and utility bills. People need to be sure they'll also be able to repay their withdrawal within the allowed time as well as continue saving for retirement.