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Changes to The Home Buyers Plan

Author: Cody Rowe - Mortgage Broker |

 Blog by Cody Rowe - Mortgage Broker

Of course, right after I put that video out, there's been some changes to the RRSP program, or more formally known as the The Home Buyers’ Plan. 

Starting as of April of last month, The Home Buyers’ Plan, or the RRSP program as some will call it, has increased their maximum down payment threshold from $35,000 up to $60,000. 

RRSP Program

So what this means is that if you're a first-time buyer looking to use your RRSP for your down payment, you'll now be able to save up to $60,000 in your RRSP tax-free for the purposes of purchasing your first home. 

This update is a long overdue one.

People in my position in our industry have been vouching for this update for many, many, many years now, especially for buyers in places like Toronto, Vancouver, Victoria, and Ottawa.

Realistically $35,000 just doesn't cut it for the type of home prices that you're dealing with in most of the major cities in Canada.

So $60,000 is really the bare minimum of what we needed as an increase, and realistically, in my opinion, should be closer to $100,000.

In my personal opinion, I think that it is not a coincidence that the timing of this change is very close to election period where the existing governments for both federal and many provincial ridings are losing in the polls. So certainly politics played a role in this recent announcement.

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The dilemma I have with this program is that generally, few people actually use this RRSP program, and when they do use it, it's rare that you're seeing them pull that maximum $35,000 out from that account.

Because there are withholding penalties for withdrawing from your RRSP before retirement (and when you are not buying your first home) most Canadians opt to save in their TFSA’s so they can retain liquidity in case they ever need that money for expenses. So realistically, do I see more people saving with this account? Potentially, but most likely not.

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