Start with your investment goals
Your financial situation, investment timeline and tolerance for risk shape the options that may be suitable for you. Discuss portfolio diversification, ongoing reviews and the appropriate account or provider with our team. Specific investments and account eligibility require individual assessment.
Account types
- RRSP: a registered retirement savings account. Contributions and withdrawals are subject to applicable tax and contribution rules.
- TFSA: a tax-free savings account, subject to contribution limits and qualified-investment rules.
- RESP: a registered education savings plan for education savings.
- LIRA: an account for locked-in pension funds, subject to applicable pension rules.
- Cash / non-registered: investments held outside a registered plan; tax treatment depends on the investment and circumstances.
An introduction to RRSP mortgages
A self-directed registered account may hold an eligible mortgage investment secured by Canadian real estate. Funds may be advanced against a single-family home, multi-family property or commercial property, subject to trustee acceptance and the applicable investment rules. Some arrangements involve RRIF or LIRA funds, cash or multiple investors.
Benefits and risks
Mortgage investing can provide exposure to real estate and contractual interest payments without managing a rental property. Terms are negotiated for the specific investment. Property security does not eliminate the risk of borrower default, delayed repayment, enforcement costs or loss of principal. Compare the risks, liquidity and concentration with your objectives.
Common questions
Must one account fund the entire mortgage?
Some mortgages can be funded by more than one investor or account. Confirm the arrangement, trustee requirements, documentation and each investor’s security before proceeding.
Does the property have to be residential?
The original service offering includes single-family homes, multi-family properties and commercial real estate. Acceptance depends on the investment and provider.
Can RRIF or LIRA funds be considered?
They may be considered where the account, pension rules and trustee permit the investment. Confirm eligibility for the particular account and mortgage.
What happens if a borrower defaults?
The lender or administrator follows the mortgage documents and applicable enforcement process. Recovery can take time and may not repay all principal, interest and expenses.
Is mortgage interest tax deductible?
A borrower’s tax treatment depends on the use of the borrowed funds and other rules. Obtain tax advice for the specific transaction; deductibility is not automatic.
What are the registered-account requirements?
Check qualified-investment and prohibited-investment rules with the trustee and tax adviser before committing funds.
The investment process
- Discuss the investment and establish a suitable self-directed account with a trustee.
- Arrange an eligible transfer of RRSP, RRIF or LIRA funds.
- Complete due diligence on the borrower, property and proposed security.
- Agree the proposed terms, conditions and interest rate.
- Have the mortgage commitment and security reviewed by a lawyer.
- Complete the commitment and required investment documentation.
- Complete the trustee’s applicable mortgage package and confirm acceptance.
- Arrange registration, funding and payment administration through the appropriate parties.
SkyReach Capital Mortgage Trust
Looking for information about the pooled mortgage investment fund? Visit SkyReach Capital Mortgage Trust to review its process, risks and offering documents.
Let’s discuss your next step
Connect with our Surrey team to discuss your goals and the available options.