Hanzala has just enough in his Registered Retirement Savings Plan (RRSP) for a conventional mortgage down payment for the condo he is purchasing which is valued at $170,000. As Hanzala does not want the withdrawal from his RRSP to be taxable, he will be withdrawing under the Home Buyers Plan (HBP). He knows that the current legislation governing the HBP allows for a maximum withdrawal amount of $35,000 from a Registered Retirement Savings Plan (RRSP) but he does not have that much in his RRSP. Hanzala also knows that he must pay at least 1/15th of the amount borrowed under this plan. Calculate the amount Hanzala is withdrawing from his RRSP under the HBP to determine his minimum annual repayment required.
Question 18
Hanzala is withdrawing the maximum allowable amount of $35,000 from his RRSP under the Home Buyers Plan (HBP). Therefore, he must pay at least 1/15th of this amount, which is $35,000 / 15 = $2,333.33.
So, Hanzala's minimum annual repayment required is $2,333.33.