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FP Answers: Should we take money from our RRSPs, TFSAs or both to make a down payment on our first home? – Financial Post

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by TD Insurance …….


This section is

This section was produced by the editorial department. The client was not given the opportunity to put restrictions on the content or review it prior to publication.

by TD Insurance

Adviser suggests using the RRSPs first and then the TFSAs, and strive to have a 20-per-cent down payment to avoid CMHC fees

Should these first-time homebuyers use their RRSPs or TFSAs to fund a down payment? Photo by Carlos Osorio/Reuters

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By Julie Cazzin with Doug Robinson

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Q: My partner Miranda and I will be buying our first home later this year. Should we use money from our registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs) or both to make a down payment? We have about $60,000 in each of our TFSAs and $20,000 each in our RRSPs. What are the pros and cons of drawing funds for this purpose from each of these accounts? We also have $40,000 in a savings account that we are using as an emergency fund, so we weren’t planning on using those funds for the down payment. — Felix

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FP Answers: Felix, you and Miranda have done an excellent job of saving money to buy a home together. I am encouraged to know you have an emergency fund of $40,000 set aside. This makes answering your question easier. Far too many people underestimate the importance of these savings.

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Lenders want 20 per cent of the purchase price as a down payment when buying …….

Source: https://financialpost.com/personal-finance/family-finance/fp-answers-should-we-take-money-from-our-rrsps-tfsas-or-both-to-make-a-down-payment-on-our-first-home

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