HBP (Home Buyers' Plan)

Real Estate

A Canadian program that lets first-time home buyers withdraw up to $35,000 from their RRSP tax-free for a down payment. You must pay it back over 15 years or it gets added to your taxable income. Both partners can use it for a combined $70,000.

Related Terms

Mortgage

A loan to buy a house where the house itself is the collateral. You typically pay it back over 25 years with interest. If you stop paying, the bank can take the house.

Mortgage Principal

The portion of your mortgage payment that actually pays down the loan amount (not interest). Early in your mortgage, most of your payment goes to interest. Later on, more goes to principal. Paying down principal builds equity in your home.

Home Equity

The portion of your home that you actually own. Calculated as home value minus what you still owe on the mortgage. If your house is worth $500,000 and you owe $300,000, you have $200,000 in equity.