Canadians Withdrawing RRSPs at Rapid Rates to Help with Homeownership Costs

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“The price situation is just as tight in Canada’s largest city where the Toronto Real Estate Board said this month a supply imbalance drove the average price of a home sold in January, across all categories, to $770,745, a 22.3 per cent increase from the $630,193 a year ago.”National Post

Some interesting and somewhat alarming news was published in the National Post this morning regarding Canadian spending habits and RRSP’s.

The report states that more Canadians than ever are dipping into their Registered Retirement Savings Plan in order to be able to absorb their debts and the cost of home-ownership. National Post reports that in a survey done for the Bank of Montreal, on average, “Canadians had withdrawn $17,213 during the year — an increase from $15,908 a year earlier.” Also, “30 per cent of [participants]… cited that … their number one reason for withdrawals [was rising real estate prices.]”

RRSP’s can be used to buy houses because first-time buyers are allowed to borrow up to $25,000 as long as they pay back this money in the stated time frame (15 years).

For Torontonians and Vancouverites are especially affected by these costs, as they boast the highest real estate prices in all of Canada.

The National Post also reported that, “After housing… the second most popular reason to take money out … was to help pay off living expenses, … pay off debt and emergencies.” This ties into a previous article, from September stating that 56% of Canadians are around “$200 monthly” away from overwhelming debt.

Read more here:
More Canadians are raiding their RRSPs to buy a house, make ends meet and pay off debt

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