The client
A newcomer eight months into her first Canadian job opened an RRSP and contributed a lump sum, planning to withdraw it days later under the Home Buyers' Plan to round out the down payment on a 395,000 home in Powell River.
Property
$395,000, Powell River
5% down, insured
RRSP contribution
Made 11 days before the planned withdrawal
Intended to fund part of the down payment
Household income
$8,400/month
Closing date
Fixed, 12 days out
Firm on the purchase contract
The problem
CRA's rule for the Home Buyers' Plan is specific: an RRSP contribution has to remain in the account for at least 90 days before it can be withdrawn under HBP. A contribution made inside that 89-day window is not eligible for the tax-free HBP withdrawal, whatever the account balance shows.
This newcomer's contribution had been in her RRSP for 11 days. Withdrawing it under HBP anyway would not simply have been inadvisable -- it would not have qualified as an eligible HBP withdrawal at all, and the closing date was fixed 12 days out.
What the 90-day rule actually does
- ▸It applies to the contribution, not the account -- an RRSP opened years ago does not season a deposit made last week
- ▸Contributions inside the 89-day window are not eligible for a tax-free HBP withdrawal
- ▸There is no waiver for a closing date that arrives before day 90 -- the rule does not bend to a purchase contract
The numbers
Once the RRSP contribution was set aside as ineligible for now, the down payment was rebuilt from documents that did not depend on a calendar the closing date could not accommodate.
| Sizing the insured mortgage | Amount |
|---|---|
| Purchase price | $395,000 |
| Down payment (5%) | -$19,750 |
| Base mortgage (95% LTV) | $375,250 |
| CMHC premium (4.0% at 95% LTV) | +$15,010 |
| Total insured mortgage | $390,260 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (6.89%), 25 years | $2,707/mo |
| Property tax | $210/mo |
| Heat (lender estimate) | $95/mo |
| Car loan | $260/mo |
| Total debt service | 39.0% |
39.0% sits comfortably inside CMHC's ceilings on the household's own steady income -- the RRSP was never needed to make the ratios work. It was only ever meant to top up the down payment, and savings did that job just as well.
The solution
A submortgage broker licensed with BCFSA caught the 90-day gap during the source-of-funds review, before the RRSP contribution was ever relied on in the mortgage application.
First, confirmed the exact contribution date against the planned withdrawal date and did the day count -- 11 days in, not 90.
Second, rebuilt the down payment from documented personal savings that had been in the client's account well past any seasoning concern, avoiding the fixed closing date entirely.
Third, left the RRSP contribution in place rather than withdrawing it improperly, so it would still be available for a properly-seasoned HBP withdrawal on a future purchase, and preserved the tax deduction for the year it was contributed.
The outcome
The mortgage funded at 4.89% with the down payment sourced entirely from documented savings. TDS came to 39.0%, comfortably inside CMHC's ceiling, and the RRSP contribution was left untouched for a future, properly-seasoned withdrawal.
This is an insured purchase, so the 39%/44% GDS/TDS maximums apply directly; both ratios landed well inside them once the down payment source was corrected.
What to take from this file
- 01The Home Buyers' Plan's 90-day rule attaches to the contribution, not the RRSP account. A long-standing account does not season a fresh deposit.
- 02Always confirm the exact contribution date against the planned withdrawal date early. A gap this specific is easy to miss until the funds are already needed.
- 03A fixed closing date will not wait for day 90. When the math does not work, rebuild the down payment from other documented sources rather than attempting an ineligible withdrawal.
- 04Leaving an under-seasoned contribution in place preserves it for later. A properly-timed HBP withdrawal on a future purchase is better than an improper one now.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸Income Tax Act (Canada), s. 146.01 — Home Buyers' Plan: up to $60,000 RRSP withdrawal, 15-year repayment.
Illustrative in this file — lender-specific, not rules:
- ▸4.89% contract rate — rates move daily; not a quote.
- ▸the 12-day closing window and 11-day contribution age — specific to this file; every purchase contract and RRSP contribution date differs.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.