With interest rates continuing higher over the foreseeable future, it is a great time to make a plan to move your mortgage interest from debt that is not tax deductible to something that is tax deductible. If done properly you can not only benefit from the lower carrying costs, but also make all (or a portion) of your interest tax deductible. For high income earners this can cut your after tax interest costs in half.
At every stage of home ownership there are opportunities to have the government help finance your mortgage.
For First time home buyer, can take advantage of RRSP’s in order to save for a down payment and reduce taxes.
For existing homeowners, there are opportunities to access your home equity in order to reduce your taxes through RRSP, RESP, and TFSA. In addition, if you access your home equity to invest in another property, securities (stocks and bond) or invest in your own business – the interest on that portion of the loan becomes tax deductible.
Finally, as you approach retirement there are opportunities to use your home equity in ways that allow you to withdraw funds from your RRSP tax free.
Everyone’s situation is different, but I am happy to put together a plan to reduce your after tax interest costs.
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