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It’s RRSP Season, Get Your Savings Working for you.

Kathryn Grant Uncategorised February 16, 2021


What is an RRSP?
“Registered Retirement Savings Plan.”
An RRSP is what’s called a tax-advantaged account, meaning that the
government created them specifically to provide tax breaks to those who
invest money in RRSPs as a way to motivate them to put away money for
their retirement.
Benefits of the Registered Retirement Savings Plan
Here’s how a tax-deferred account like an RRSP works. Let’s say you make
$70,000 a year and you decide to put the maximum allowable into your
RRSP—$12,600. When tax day comes around, the CRA will treat you as
though you earned just $57,400.
Can an RRSP be used to buy a house?
With the federal government’s Home Buyers’ Plan, you can use up to
$35,000 of your RRSP savings ($70,000 for a couple) to help finance your
down payment on a home.
To qualify, the RRSP funds you’re using must be on deposit for at least 90
days. You must also provide a signed agreement to buy or build a qualifying

*Please note that there are lenders offering RRSP loans, but please
contact your financial planner for more information.

Genworth and Canada Guaranty Won’t Adopt CMHC’s New Mortgage Rules

Following the announcement of CMHC’s new mortgage underwriting rules last week, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, have confirmed that they will not be following CMHC’s lead.

Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure.

Mary Putnam, VP, Sales and Marketing of Canada Guaranty said that “recent insurer announcements relating to down payment and minimum credit score represent a very small component of Canada Guaranty’s business, and we will continue to be prudent in these areas. Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.”

Some believe that the announcement from Genworth and Canada Guaranty is a positive one for borrowers who will continue to have some options in the markets should they not be able to meet CMHC’s stricter qualification standards.


Bank of Canada cuts key rate to 0.25%

The central bank lowered its policy rate Friday by another half a percentage point to 0.25 per cent, adding in a statement that the unscheduled decision brings the benchmark as low as policy makers are willing to take it for now.

The move was necessitated by quickly deteriorating conditions, including a flood of new jobless claims last week.

The Bank of Canada last cut rates to these levels in 2009, during the global financial crisis

The next question is will the banks follow suit and lower their prime rates…

As of March 28 2020:

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal have cut their prime lending rates 50 basis points to 2.45 per cent from 2.95 per cent in a move matching the Bank of Canada’s latest interest rate cut.

The prime rate underpins a slate of variable-rate loans, including mortgages, which impacts the cost of borrowing for a range of financial products.


For more information:



Prime Rate Change

Kathryn Grant Education March 18, 2020

What is Prime rate?

The prime rate, also known as the prime lending rate, is the annual interest rate Canada’s major banks and financial institutions use to set interest rates for variable loans and lines of credit, including variable-rate mortgages.

The prime rate is primarily influenced by the policy interest rate set by the Bank of Canada (BOC), also known as the BOC’s target for the overnight rate.

When you apply for a loan with a variable interest rate, your lender will give you an annual interest rate that’s tied to the bank’s prime rate. All kinds of loans are based on this rate, including certain mortgages, car loans, personal lines of credit, and even some credit cards. Think of the prime rate as the anchor these other interest rates are based on. As the prime rate moves up or down, so too does the rate of interest you pay on your loan.

As of March 17, 20

Several Canadian banks and financial institutions have dropped their prime lending rate by 50 basis points for the second time in two weeks, this time to 2.95 per cent.

The Royal Bank, Toronto-Dominion Bank, Scotiabank, Bank of Montreal, CIBC and the Desjardins Group match the Bank of Canada’s decision last Friday to drop its key lending rate by 50 basis points to 0.75 per cent.

The central bank says the unscheduled rate decision is a “proactive measure taken in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.”

The rate cuts will make mortgages and other borrowing cheaper.

* BOC= BANK OF Canada.