For first-time homebuyers in Canada, tapping into their Registered Retirement Savings Plan (RRSP) can provide a significant boost for their mortgage down payment. Through the RRSP Home Buyers' Plan (HBP), individuals can borrow up to $60,000 tax-free from their RRSPs, while couples purchasing together can access a combined total of $120,000. However, this borrowed amount must be repaid within 15 years, as it's considered a loan.
Exciting news came on April 11, 2024, when the Federal government announced an expansion of the withdrawal limit for the HBP from $35,000 to $60,000, effective April 16, 2024. This marks the second increase since the plan's inception in 1992, with the last update occurring in 2019 when the limit was raised from $25,000.
Additionally, the new measure extends the repayment timeline for HBP withdrawals made between January 1, 2022, and December 31, 2025. Instead of the previous two years, homebuyers now have five years before they must begin making repayment instalments.