Updated almost 10 years ago on . Most recent reply
Non Arms RRSP Mortgage - Ontario, Canada
I have hit the $$ wall like most investors. Many opportunities exist but I don't have the downpayment to further my real estate investment.
I have been researching how to make my RRSP, LIRA, etc work for me.
I have read Shirepoint site that teaches Arms Length RRSP but I would rather loan to myself.
After further investigation, I have come across TD's web site where you can do a Non Arms Length mortgage. Before any of you respond that TD no longer does that, I have checked with my branch and they do. What they no longer do is Arm Length.
Apparently, you can loan yourself from you self directed RRSP. It is registered through a lawyer and the bank. A mortgage insurer must also be involved. Typical fee for CMHC, between 1.5% to 2.5%. You charge yourself typical market interests rate. So, you are paying yourself 10%-12% and it is insured by CHMC. The 10-12% you are putting back in tax free.
Couple questions that I have
I want to take out this mortgage for my principle residence - since I will be using the money to pay off credit lines that I am using to fund my real estate investing - would the interest I am paying be.
What is the maximum rate I can charge myself?
How tough is CMHC on this type of plan?
My credit is very good - no missed payments in years - but - I have had 15 inquires on my credit in the last year (bought 10 properties). How much will the inquires drop my rating?