HBP
Home Buyers' Plan
Canadian mortgage term definition with formula, examples, and limits used by mortgage brokers.
Definition
CRA program allowing first-time buyers to withdraw up to $35,000 per person ($70,000 per couple) from their RRSP tax-free to use as a down payment. Must be repaid over 15 years.
Standard Limit
Max $35,000 per person; repay 1/15 per year for 15 years
Example
Couple withdraws $35K each ($70K total) for down payment. Repay $4,667/year each for 15 years.
Related Terms
GDSMonthly housing costs divided by gross monthly income. Includes mortgage payment, property tax, heating, and 50% of condo fees.TDSAll monthly debt payments divided by gross monthly income. Includes housing costs plus credit cards, car loans, lines of credit, and other debts.LTVTotal mortgage debt divided by property value. Determines if CMHC insurance is required and which lenders qualify.CMHC InsuranceMandatory mortgage default insurance required when down payment is less than 20% (LTV > 80%). Enables up to 95% LTV financing.Stress TestBorrowers must qualify at a higher interest rate to ensure affordability if rates rise. Calculated as the maximum of contract rate + 2% or 5.25%.
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