Thinking about buying your first home? Wish you had saved up a good downpayment? Maybe you have, but didn't know it. First-time homebuyers can tap into their RRSP to help with a home purchase. Thank the federal government (a previous one) for this great initiative. Designed to help first-time buyers get into home ownership, the program lets you access tax-free monies for use towards the purchase or even construction of your first home.

Why Tap Into Your RRSP?
The most common reason is to boost the downpayment on a home. The bigger your downpayment, after all, the smaller your mortgage. And you may qualify for better interest rates too; your healthy downpayment shows the lender that you are a low risk candidate for a mortgage loan. Your RRSP can help provide the funds for a downpayment that will make a difference to your costs in the long run.

Here's How It Works
If you've been contributing to an RRSP, then you already know that the program is designed to set aside money for retirement, with the money going into the program tax-free (and the plan to pay taxes on the funds when they're withdrawn later).

But there are some good and valid reasons why you may want to access these funds earlier. A home purchase may be one of them. As a first-time homebuyer, you are allowed to withdraw money: still tax-free,,provided you adhere to the easy repayment plan. (Just make sure, of course, that your RSP is not a locked in plan). You can withdraw up to $20,000.00 from your plan.

If your spouse qualifies as a first-time homebuyer, then he or she will also be able to withdraw $20,000.00. Between the two of you, you could possibly have a hefty down payment sum of $40,000.00. That's enough to make a substantial difference in the affordability of home ownership!

About the author: The House Team is commited to providing quality information to help people like you make informed decisions about their mortgage financing needs. The source for your Ontario Mortgage. Looking for a free mortgage calculator? Click Here Mortgage Calculator Ontario