RRSP Mortgages - What you NEED to Know


Enjoy this post sponsored by Streetwise Mortgages.


As mortgage brokers specializing in income property financing, we receive hundreds of questions

from Canadian real estate investors across the country in regards to financing multiple rental properties in Canada


A common question we get asked is:


How you do you use a RRSP mortgage to invest in Real Estate?

If you are looking for passive tax-sheltered returns within your RRSPS (or registered funds) using Real Estate; then this strategy would be a great option as it is also a low cost low maintenance option.

This method falls under what CRA calls “Arms-length “under the tax act.

How does RRSP Mortgages Work in Canada?

Your RRSPs is like a basket with various investment types in it, such as stocks, bonds and/or money market funds.

In order to utilize RRSPs in Real Estate under this method, a few things must hold:

  1. The RRSPs must be setup as a mortgage against the Real Estate. Think about the mortgage as another investment type within your RRSP basket

  2. The Real Estate cannot be owned by you or a corporation that you own

  3. The RRSP loan must be administered by a Trust company approved by CRA, such as Community Trust, Canadian Western Trust or Olympia Trust.

Due to the tighter lender guidelines, some borrowers are unable to obtain an 80% mortgage on a rental property from institutional lenders. This is where borrowers turn to alternative sources of funding to supplement the shortage and this is where they would turn to a client like yourself with RRSPs funds to invest.


Here's an example of RRSP Mortgage deal for a rental property:

Let’s say that you have $50,000 in RRSPS + another $25,000 in a TFSA that you are looking to invest in Real Estate in a passive fashion.

Heather, a Real Estate investor who is looking to buy a rental property for $500,000 and renovate the property.


Heather unfortunately has been declined by her bank due to the condition of the property, but has been approved by a B lender for 65% of the value through her mortgage broker.