Using your RRSP money for your down payment is a great strategy for some first-time buyers. It may help you achieve the 20 per cent down payment needed to avoid mortgage default insurance premiums, or simply give you a financial boost when you need it most. First-time home buyers can withdraw up $35,000 per person ($70,000 per couple) under the Federal Home Buyers’ Program (HBP).

Here is how to boost this opportunity even further. If you have saved up to $35,000 and have enough RRSP contribution room, you can contribute that amount to your RRSP by the March 2nd deadline. Then after 90 days, you can redeem those funds under the HBP so the money is available for your down payment. Since your contribution counts as a tax deduction, the tax refund you get this spring is an added down payment boost. Your refund is based on the amount you contribute and your marginal tax rate. So, in effect, you are letting the taxman help you buy your first home! The program does require that you pay the withdrawn funds back on a 15-year repayment plan.

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