Do you need funds to increase your RRSP contribution1? By opting for a term loan or a line of credit, you can maximize your income tax return and use it to repay the amount you borrowed, while saving for retirement.
In most cases, you can get approved quickly for a minimum amount of $1,000 with a fixed or variable rate. Your first payment can be deferred for three or six months.1 Payments are automatically debited from your account.
Get a line of credit for at least $5,000 with a competitive rate and you won't have to apply for RRSP financing each year.
Ready to apply for financing to maximize your RRSP contributions?
Tip
Don't leave your debt to loved ones in case of death, disability or critical illness. Make sure you're protected with loan insurance.
Borrowing scenarios
Example :
If you're taxed at 40% and you contribute $3,000 to an RRSP, your income tax return will be $1,200 (3,000 x 40% = 1,200).
If you're taxed at 40% and you borrow $2,000 to add to your initial RRSP contribution of $3,000, you'll get $2,000 back (5,000 x 40% = 2,000).
So your income tax return repays the entire loan, and you've saved $5,000 instead of $3,000 for your retirement.
Take out an RRSP loan or line of credit* and take advantage of the Home Buyers' Plan (HBP) to buy your first home, or the Lifelong Learning Plan (LLP) to go back to school.
Here's how:
*Subject to credit approval by National Bank. Speak with your accountant, tax specialist or financial planner to see if this is the right strategy for you.
Rates for RRSP loans and lines of credit
Prime rate (P) = ${p1.tauxBase|percent:"true"}, as at April 1, 20203
RRSP loans |
|||
Terms (months) |
Fixed rate |
Variable rate |
|
Less than $10,000 |
$10,000 or more |
||
3-12 |
5.25 |
5.00 |
P + 0.75 = 3.200 |
13-24 |
6.25 |
5.50 |
P + 1.25 = 3.700 |
25-36 |
6.25 |
5.50 |
P + 1.75 = 4.200 |
37-48 |
6.50 |
6.25 |
P + 2.25 = 4.700 |
49-60 |
6.75 |
6.50 |
|
61-84 |
---- |
6.75 |
|
85-120 |
---- |
7.25 |
|
RRSP lines of credit |
|||
$1/month management fee |
|||
Rate |
P + 1.50 = 3.950 |
Rate |
T + 1.50 = 3.950 |
Rates are subject to change without notice.
1. Subject to credit approval by National Bank.
2. The prime rate means the annual variable interest rate posted by National Bank, from time to time, and used by the Bank to determine the interest rates on the demand loans it grants in Canadian dollars in Canada.
3. Account statements are produced monthly. Interest accrues as soon as an amount is drawn on the line of credit. Examples of credit charges calculated for a period of thirty (30) days based on the rate in effect on ${p1.dateJour|date:"full"}:
Average balance | ||
Regular interest rate (no annual fees) |
$500 |
$3,000 |
Prime rate +1.50% (5.20%) |
$2.14 | $12.82 |
You can choose a fixed or variable rate loan to help you with a major purchase or goal.
Fill out an online application or meet with an advisor for personalized assistance.