You know the old saying, “every little bit counts”? When investing in real estate, this old saying certainly applies. With a competitive marketplace, the pricey cost of living in our society, and the endless advice on spending vs. saving, deciding how to finance the purchase of your home can be a troublesome feat. 

Sometimes I feel sorry for the younger generation of home buyers. Can you imagine how difficult it would be to buy a first home with the inflated costs on the market? It’s become nearly impossible for young home buyers to purchase their first home without the help of an RRSP. 

By dipping into an RRSP, you can make a 20% investment on the down deposit, and avoid paying mortgage loan insurance. Saving that amount on loan insurance, and making a larger deposit on purchase means that monthly payments will be less. 

Sounds good, right? 

Well, yes. But it means the home buyer would have had to be diligent on savings for years beforehand, and that’s pretty tough to do sometimes, isn’t it?

Also, by reducing the amount of funds within the RRSP, the buyer is subsequently lessening the amount within their investment and losing on years of compound growth.

What would your best advice be for home buyers? Should they buy, or rent until dipping into the RRSP is unnecessary? 

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