RRSP Mortgages

A Registered Retirement Savings Plan (RRSP) is a type of Canadian account for holding savings and investment assets. RRSPs have various tax advantages compared to investing outside of tax-preferred accounts.  They were introduced in 1957 to promote savings for retirement by employees and self-employed people.  Contributions to RRSPs are deductible from taxable income, reducing income tax payable for the year in which the contributions are claimed.  No income earned in the account is taxed (including interest, dividends, capital gains, foreign exchange gains, mortality credits, etc.). Most withdrawals are taxed as income when they are withdrawn.

You would be surprised to learn how many people don’t know what you can actually hold in an RRSP.  Many people only believe that mutual funds are the only things that you can  hold in your RRSPs and that is incorrect.

What Can You Hold in An RRSP-0_1

Unfortunately, an RRSP is not legally allowed to actually own real estate directly but it can lend money secured by a mortgage on property. Your RRSP  can lend funds to another property owner who then provides a mortgage back to the RRSP for security purposes.  You can’t borrow your own RRSP funds as a mortgage on your own property without some prohibitively high fees and interest, but you can invest in an Arm’s Length Mortgages.