Can You Use RRSPs For A Down Payment?

Question

“I have been contemplating taking your Creative Financing Using RRSP Mortgages course… I have a quick question for you that I’m wondering if you could help me with.  Is it possible to go the traditional financing route but use someone else’s RRSP money for the down-payment?

For example, buy a property for $200K:

• 80% mortgage from the bank = $160K
• 20% down-payment consisting of:
  • 15% RRSP investment from 3^rd party to be on title = $30K
  • 5% cash investment by me = $10K

Any advice, would be greatly appreciated.”

Greg from Ottawa, Ontario

Answer

This scenario is possible, but you’ll likely have to close with 20% cash resources first and then go back and add the 2nd mortgage shortly after closing.  This is because most 1st mortgage lenders want to see you have equity in the deal.

Just be careful you don’t get a collateral mortgage from the big banks (e.g. TD, RBC, etc.), which may place a full 100% charge against the property even though they are only lending you 80% LTV.

In addition, one of the trustees I recommend in the course will not go above 90%, so you will have to use one of the remaining two.

Creative Financing Using
RRSP Mortgages

Discover how to use other people’s
RRSPs, RRIFs, LIRAs, RESPs and TFSAs
to finance real estate.

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