Home Buyers’ Plan (HBP)

What is a Home Buyers’ Plan (HBP)?

Home Buyers’ Plan (HBP) Definition: The HBP or Home Buyer’s Plan is a program in Canada that lets individuals to buy a new home with RRSPs (registered retirement savings plans) and use up to a specific amount as a loan for this purpose. RRSPs are typically used to save money for retirement for self-employed and employees in Canada, similar to the 401k plan in the U.S.

To qualify for the HBP program, borrowed funds must be repaid over seventeen years, though there are no mandatory requirements to repay the loan for the first two years. Borrowers also benefit from investing in an RRSP pre-tax, which is a good option for saving on income tax returns while contributing to an investment that can be used to buy a home.

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