Commercial mortgages do differ from residential mortgages, but one thing remains the same: borrowers still have trouble coming up with a down payment. One is certainly needed when applying for a commercial mortgage, and they’re just as difficult to save up for. Especially when you consider that commercial mortgages are often at least twice as costly as residential mortgages. So how can you save up for that major down payment?

Saving up enough in a savings account is often not an option. But what many business owners and investors aren’t aware of is that the RRSP that’s sitting there accumulating funds can be used for a commercial mortgage, just like it can be used for a residential one.

One of the biggest benefits of doing this is that you won’t have to liquidate your RRSP, meaning that you won’t need to pull all the money out of it before handing it over to a broker or seller to be used as your down payment. Simply bring in proof of your RRSP, possible with your RRSP statement, and have them take care of the rest. While the money most likely won’t be pulled from the RRSP right away, your broker and lawyer will take care of this at the time of closing.

Of course, if you do have a tidy pile set aside somewhere else as savings, such as in a savings account, you can always use a portion of those funds, as well as a portion of your RRSP. You never need to use everything you have in your RRSP, which can be useful for those that don’t want to be held to strict repayment terms once they’ve used up all or a portion of their RRSP.

It’s true that commercial and residential mortgages can be quite different; but they can also be quite similar. Using your RRSPs to help you make the down payment on your new office building or restaurant, is one area in which these two align.


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