Real Estate

Is A RRSP Mortgage Loan Worth It ?

  • Last Updated:
  • May 4th, 2018 7:16 am
Tags:
None
4 replies
Deal Addict
Mar 13, 2017
1005 posts
1181 upvotes
Firstly, banks don't like this vehicle. So be prepared to hear, "we don't do this"

I like it, and have used it for issuing arms-length private mortgages. Great way to use non leverage-able funds.

Olympia Trust out of Alberta is who I've use.
Deal Guru
Feb 22, 2011
10760 posts
13485 upvotes
Toronto
You are essentially giving yourself an interest free loan, which can be great but it could also hurt you. If you anticipate making a higher income in the future the amount you pay back will no longer be tax deductible as it is paying back the amount you withdrew. This could hurt you if you have some income in the higher brackets. Not really an issue for the average person but something to think about if you make a substantial amount. You would also be losing out on market returns if you are no longer invested in markets thus furthering your lack of diversification by putting everyone in one asset.
[OP]
Newbie
Jan 14, 2017
24 posts
3 upvotes
article suggests TD does it.
Tell me if my understanding is correct. So $100,000 on a 25 year loan term would look like

Interest "Earned" in RRSP $50,189
Annual Fee (25 years) $5,850
Legal + Account Opening Fee: $1000 + $250 = $1250
CMHC Insurance = 0.5% x 100,000 = $500
Total Fee = $7,600


Date Interest Principal Balance AnnualFee
2017 873 629 99371 $225
2018 3437 2570 96801 $225
2019 3346 2662 94139 $225
2020 3251 2757 91382 $225
2021 3153 2855 88528 $225
2022 3051 2956 85572 $225
2023 2946 3061 82510 $225
2024 2837 3170 79340 $225
2025 2725 3283 76057 $225
2026 2608 3400 72658 $225
2027 2487 3521 69137 $225
2028 2362 3646 65491 $225
2029 2232 3775 61716 $225
2030 2098 3910 57806 $225
2031 1959 4049 53757 $225
2032 1815 4193 49564 $225
2033 1666 4342 45222 $225
2034 1511 4496 40726 $225
2035 1351 4656 36070 $225
2036 1186 4822 31248 $225
2037 1014 4993 26255 $225
2038 836 5171 21084 $225
2039 653 5355 15729 $225
2040 462 5545 10183 $225
2041 265 5743 4441 $225
2042 65 4441 0 $225
Deal Addict
Jun 27, 2015
2067 posts
353 upvotes
East York, ON
OP The Star article was 6 years old. Is this product still available at TD?
Lots of crazy 💡

Top