Using RRSP as downpayment WOW! But! We have better idea.

As you may or may not know GE and CMHC recently introduced their 100% financing programs. Wondering if it makes sense to make a down payment on a home? Here is an example for you all to follow:

At 95 % financing- the CMHC premium is 2.75%

At 100% financing- the premium is only 3.10%

Taking that into consideration let’s see what difference it makes on a $300,000 purchase:

At 95% financing $300,000 purchase price 5% down payment would be $15,000
Premium would be: 2.75% or $7837.50

At 100% financing No downpayment
Premium would be 3.10% or $9300

So for a premium difference of only $1463 you don’t have to make a down payment. Seems to me like an incredibly low cost to save injecting $15,000

Consider this option:

Take that $15,000 and deposit it into an RRSP . At an average 40% refund rateyou would get $6000 back in tax refund. Apply that refund back onto the mortgage.
YOU ARE WAY AHEAD………not only have you reduced your mortgage by $6000 but you also now have a $15,000 RRSP.
Hope this makes sense. Wish to know more ? You know who to call.