How to finance your first property?

Here are a few tips to help you save for your project:

  • Buying a home is an important decision.

    Before moving forward, you need to ask yourself a few questions. Do you have the financial means to make a major purchase such as this? Do you have the discipline to make the required repayments?

    • Determine your ability to pay over the short and medium terms, the financial obligations related with the purchase of a property. Since the mortgage repayment will be a big part of these obligations, it's important to have a clear idea of your financial situation.
    • Draw up an accurate account of your financial inflows and outflows over the last 12 months. Doing so will allow you to determine the amount that you can allocate to the repayment of your mortgage each month.
    • You can also hire a financial advisor to help you accurately determine your borrowing capacity.
    • You may also want to meet with a real estate agent, who can guide you through the purchase process.

    Prepare for the unexpected.

    When you buy a home, it's best to have a financial cushion in case difficult times arise. No one is immune from possible loss of income, an unexpected increase in expenses or rising interest rates. 

  • After determining your financial means, meet with your lender or mortgage broker to review your options. They'll let you know what you need to do to get a mortgage pre-approval once you've found the property you want to buy.

    What's a mortgage pre-approval?

    It's a way to knowing ahead of time the amount your financial institution is willing to lend you to purchase a home. It also lets you know how much you can pay, what your interest rate will be for the loan term and how much your mortgage payments will be.

    If possible, choose weekly or bi-weekly, rather than monthly, payments. By doing so, you'll pay off your mortgage faster and pay less interest!

  • What is the HBP?

    The Home Buyers' Plan (HBP) allows you to use the money you've saved in your RRSP to purchase a qualifying home without having to pay tax. It's like an interest-free loan you give to yourself.

    Does the HBP have a maximum threshold?

    Under the HBP, each spouse can withdraw up to $35,000 from their RRSP without paying tax. Eligible amounts must have been contributed to your RRSP no less than 90 days before the withdrawal date.

    Who is eligible for the HBP?

    In order to be eligible for the HBP, you must be considered a first-time home buyer. That being said, you can be considered a first-time buyer more than once in your lifetime.

    You are considered as a first-time home buyer if you haven't lived in a home owned either by you, your current spouse, or your common-law partner in the four years leading up to the withdrawal.

    You must also meet the following criteria:

    • You must have a written agreement to buy or build a qualifying home.
    • You must be a resident of Canada.
    • You must intend to occupy the qualifying home as your principal place of residence within one year of buying or building it.

    For more information about all eligibility requirements, visit the Canada Revenue Agency.

    If you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1 of the year of the withdrawal is zero and you meet all the other HBP eligibility requirements.

    How are HBP repayments made?

    You will need to put the money back into an RRSP over a maximum period of 15 years, repaying 1/15th of the total amount you withdrew per year. Your first repayment is due the second year following the year you first withdrew funds from your RRSP. So, if you take advantage of the HBP in 2023, your first year of repayment will be 2025.

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How to save for a down payment to buy a home?

Before you can purchase the home of your dreams, you need to save for a down payment. Here are a few tips to help you achieve your goal.

Read the articleFleche droite lien

Use your RRSPs to buy a home thanks to the HBP

Your RRSP allows you to save for a down payment in hopes of taking advantage of the Home Buyers' Plan (HBP). These contributions are also tax deductible. That means you'll defer the taxes you have to pay, and can use your savings to buy a home sooner than later.

The RRSP+ with the Fonds: Become a homeowner for less

By contributing to an RRSP+ with the Fonds, you'll benefit from an additional 30% in tax savings.1 And by reinvesting those tax savings, you can save even more and reach your goal that much sooner.

Discover the RRSP+ with the Fonds

The RRSP with FlexiFonds: A flexible product for life's major events

In addition to the tax advantages of an RRSP, you'll have access to mutual funds with a strong focus on Québec investments so that you can reach your goal while supporting the local economy. Contributions can be made through automatic or one-time bank withdrawals. 

Learn more about the RRSP with FlexiFonds

Did you know? You can make HBP payments for money you withdrew from another financial institution by contributing to an RRSP+ with the Fonds!

Not only is this possible, but it's also advantageous, since you'll benefit from an additional 30% in tax credits1. These savings will allow you to repay your HBP that much faster.

Supplementing your down payment with a TFSA

Depending on your situation and your savings horizon, the TFSA with FlexiFonds can be a great way to save for a down payment or to top it up. This account allows your money to grow tax-free, and you'll be able to access your money when you need it without any redemption fees.

Not eligible for the HBP?

Thanks to its tax benefits, using a TFSA to save for a down payment can be an excellent savings strategy.

New to the job market?

You may want to consider using a TFSA and save your RRSP contribution room for later when you have more income.

Hoping to buy a second home?

Since you can't use the HBP to buy a second home, the TFSA can be a good way to save for a down payment.

Most frequently asked questions

Redemptions and withdrawals
What are the eligibility criteria for the HBP?
Basically, you qualify for the HBP if you're buying your first home.
More Details : What are the eligibility criteria for the HBP?
Redemptions and withdrawals
Can my spouse and I each make an HBP redemption request under the HBP?
Absolutely. Each spouse can withdraw up to $35,000 from their RRSP without paying tax.
More Details : Can my spouse and I each make an HBP redemption request under the HBP?
Redemptions and withdrawals
How much can I withdraw under the HBP?
You can withdraw the RRSP or spousal RRSP contributions you've made in the last 90 days.
More Details : How much can I withdraw under the HBP?
FlexiFonds
What are the withdrawal conditions for units registered in a TFSA with FlexiFonds?
There are no withdrawal conditions or transaction fees on all FlexiFonds products.
More Details : What are the withdrawal conditions for units registered in a TFSA with FlexiFonds?
FlexiFonds
Do I get the 30% tax credits with the FlexiFonds offering?
The 30% tax credits are only available with the Class A shares of the Fonds. No labour-sponsored fund tax credit is applicable to FlexiFonds. With  FlexiFonds products, you get the tax benefits related to the savings vehicles offered and the opportunity to easily access your savings when you need them.
More Details : Do I get the 30% tax credits with the FlexiFonds offering?
FlexiFonds
Can I transfer my savings to FlexiFonds from another financial institution?
Yes. You can transfer a TFSA or RRSP to FlexiFonds by phone or directly online. To transfer a RRIF, you will need to call us.
More Details : Can I transfer my savings to FlexiFonds from another financial institution?

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