Can anyone tell me what financing rules apply to buying a cottage in Canada?

Does the 5% downpayment apply and can you use some of your RRSP for it?

Ted Faw
Tuesday, September 14, 2004

Ah, RRSPs and Mortgage Loan Insurance... pure Canadian content.

No, sir. Not if you're planning on using your cottage in the same manner that I use mine.

Unless you're planning on living in your cottage full-time (making it your official 'primary residence'), then it

will be considered a recreational property. This means that not only can you NOT take advantage of the Home Buyer's Plan and use a portion of your RRSPs for the purchase, but neither can pay for mortgage insurance in order to get away with only 5% up front. I'm afraid you'll have to dig deep and cough up the full 25% down payment.

Sorry.

Derek
Thursday, September 23, 2004