Interest Rates on RRSP Mortgages

Podcast Episode 96:
“RRSP Mortgages.

In Canada, it is possible to use money held in a Registered Retirement Savings Plan (RRSP) to fund mortgages. While this strategy can yield a nice steady return on investment, there are rules in place that can make it a bit tricky to get into. One of those rules is that the lender (i.e., the person with the RRSP) must use a third party trustee to administer the mortgage. This Tale is about dealing with a couple of different trustees and their policies on interest rates. RRSP mortgages must legally be “commercially reasonable,” but apparently there is a lot of room for interpretation of what exactly that means…

 

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“Mortgage” image courtesy of NYPhotographic.com used under Creative Commons Attribution-Sharealike 3.0.