The federal Home Buyers’ Plan is an effective home financing tool, originally promoted by REAL ESTATE AGENTS as a way for the government to support home ownership. Since the Home Buyers’ Plan was introduced in 1992, more than half a million homes have been purchased by first-time home buyers using their RRSP investments.

Under the terms of the Plan, individuals who enter into an agreement to buy a home can borrow up to $20,000 from their RRSPs. Because there are usually two participants involved in the purchase of a home, a maximum of $40,000 is available from individual RRSPs to be used for the down payment. Individuals have 15 years to repay the funds withdrawn from their RRSPs without incurring any penalties.