RRSP's as mortgages

There are 3 different ways to use RRSP money to invest in property.

1. Home Buyer's Plan - you borrow from your own RRSP to buy your first home, withdrawals must be repaid over no more than 15 years, the catch on this one is that it must be paid back yearly by at least 1/15 of what you borrowed or you pay tax on that portion. Many, and I mean most people get caught in having to pay the extra tax each year because they do not re-invest money back into their RRSP account.
2. Non-Arms Length Mortgage - you borrow from your own RRSP or that of a family member, money is borrowed in the form of a mortgage and must be insured by CMHC, which is fees to borrow your own money basically and pay yourself interest if you want or not if you don't want, you must qualify as with a normal mortgage (CMHC's guidelines)
3. Arms Length Mortgage - you borrow from someone else's RRSP (must be unrelated) or lend yours to someone else(unrelated), money is borrowed or held in the form of a mortgage, no insurance or qualification is required

As you can see, each method is quite different. There are rules laid out but CRA and CMHC that guide you as to what you can and cannot do.

Keenan