How does it work?
Under the "HBP", Revenue Canada permits you to use your RRSP funds towards the purchase of a new home. The default insurance companies support this program (when your down payment is less than 25%) in allotting the RRSP funds as a source of down payment.
No penalty for withdrawal
There are no negative effects from removing funds from the RRSP - in short, individuals are able to withdraw monies from their fund without penalty:
*No tax is owed on the monies withdrawn.
*No interest is paid on the monies while it is outside of your RRSP.
