Real Estate

Mortgage held in an RRSP

  • Last Updated:
  • Jul 3rd, 2020 6:40 pm
[OP]
Member
Nov 1, 2010
397 posts
56 upvotes

Mortgage held in an RRSP

While this topic has been discussed ad nauseam here and there, I'd like to bring what I think is a new element (a new twist?) for comments.

Context
I'll be leaving civil service position shortly to pursue a career as an independent contractor (rather than just a great paycheck). I've been told by mortgage broker and bank rep that once my mortgage is up for renewal next year, I might be hard press to get a decent rate in light of my new employment status. I'm told that whereas my present condition would help me get quite a decent rate (always has), the lack of income history and other risks associated with my new career are sure to raise those offered interest rates.

Question
As I have will have sufficient RRSPs to hold my mortgage, could this be a situation where holding my mortgage in my RRSP make sense?

I've asked this question a few times (not here) and have yet to receive well reasoned answer. I hope you can assist. Thank you.
1 reply
Deal Fanatic
Jan 15, 2017
5222 posts
5262 upvotes
Ottawa
If you are asking whether holding your mortgage in a self-directed RRSP would provide you with a decent rate, the answer is no. In actual fact, mortgages held in RRSPs are at the posted rate and not a discounted rate. In addition, these mortgages have to carry mortgage default insurance, which also increases your overall costs. Plus, self-directed mortgages also have other admin fees with them. You will also need to meet the same underwriting criteria as well.

http://genworth.ca/en/products/self-dir ... ogram.aspx

https://business.financialpost.com/pers ... he-trouble

https://www.wealthsimple.com/en-ca/lear ... p_mortgage

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