How to Turn $150K Into a $200K Down Payment: A Playbook for First-Time Buyers

A picture depicting Craig Austin, guest author of this blog post. Craig is wearing a blue shirt and smiling at the camera.

Guest Author Craig Austin,
Mortgage Agent Level 2 | FSRA #M19001164
We Are Mortgages | BRX Mortgage Inc. 13463

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Buying a first home is a huge milestone,

but for many Canadians, saving for the down payment can feel like an uphill battle. Rising home prices and borrowing costs have made this a significant challenge—but with the right strategy, there’s a way to help your clients stretch their savings further.

The Secret Weapons: RRSP and FHSA

These government programs are tailor-made for first-time buyers:

1. RRSP First-Time Home Buyers’ Plan (HBP)
– Withdraw up to $60,000 tax-free per person.
– Contributions reduce taxable income, resulting in significant tax refunds.

2. First Home Savings Account (FHSA)
– Save up to $8,000 annually, with a lifetime limit of $40,000 per person.
– Contributions are tax-deductible, and withdrawals are entirely tax-free when buying a first home.

By combining these programs, clients don’t just save—they grow their savings into something much bigger.

The Game Plan: Turning $150K Into $200K in Two Years

Here’s how it works:

Year 1: Build the Foundation
– RRSP Contributions: Each partner contributes $30,000 → Earns $9,900 in tax refunds per person (based on a 33% tax rate).
– FHSA Contributions: Each partner contributes $8,000 → Earns $2,640 in tax refunds per person.
– Year 1 Refunds: $12,540 per person, $25,080 combined.

Year 2: Double Down
– Repeat Contributions: Another $30,000 to RRSP and $8,000 to FHSA per person.
– Year 2 Refunds: Another $12,540 per person, $25,080 combined.

The Results After Two Years
– RRSP Withdrawals (HBP): $120,000 total.
– FHSA Balances: $32,000 total.
– Tax Refunds: $50,160 total.

Total Down Payment:
$120,000 (RRSP) + $32,000 (FHSA) + $50,160 (refunds) = $202,160

Why This Strategy Works?
This isn’t just about saving; it’s about maximizing buying power through tax-smart planning:

– Immediate Tax Relief: RRSPs provide hefty refunds while enabling tax-free withdrawals through the HBP.
– Tax-Free Growth: FHSAs combine deductible contributions with tax-free withdrawals, doubling the impact.
– Smarter Contributions: Spreading contributions over two years maximizes refunds without overstretching finances.

The Payoff
– Bigger Budget: A larger down payment reduces mortgage size and interest costs.
– Tax Savings: Extra refunds can go directly toward the home purchase.
– Proven Path: This strategy is practical and achievable for first-time buyers.

Basement Apartments in Ontario: A Landlord’s Guide to Legal Secondary Suites

What is a Basement Apartment & What makes it a Legal unit in Ontario?

A basement apartment is simply described as a home within a home. It is a separate living space in the lower level of the property. In Ontario, these are also called “secondary suites.” They have their own entrance, kitchen, bathroom, and living space.

Many Ontario homeowners add basement apartments to help with their mortgage payment’s. A basement apartment does more than help pay your mortgage and boost your income. As a landlord, you can earn between $800 to $2,500 per month, depending on the size of the unit and where your home is located.

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