A little tip for your RRSP ……….

With the recent introduction of the GE and now CHMC 100% financing programs, wondering if it makes any sense to make a down payment on a home if you don’t have to.

For example:

At 95 % financing the CMHC premium is 2.75%

At 100% financing the premium is only 3.10%

Taking that into consideration….let’s see what difference it makes on a $300,000 purchase:

At 95% financing

5% down payment would be $ 15,000

Premium would be 2.75% or $ 7,837.50

At 100% financing

No down payment

Premium would be 3.1% or $ 9,300

So ….for a premium difference of only $ 1463…you don’t have to make a down payment (certain conditions apply)

Seems to me like an incredibly low cost to save injecting $15,000

Consider this option:

Take that $ 15,000 and deposit it into an RRSP.

At an average 40% refund rate…you would get $ 6,000 back in tax refund.

Apply that refund back onto the mortgage…YOU … not only have your reduced your mortgage by $ 6,000 but you also now have a $ 15,000 RRSP.

Feel free to call me back at my cell: 416 828 9064 to help you finding your first home with no down payment and to get a “Cruise for Two” in Caribbean as a closing gift!

Sincerely,

Marius Mitrofan B. Eng.

ABR, Sales Representative