How to Become a Mortgage Investor (with Registered Funds)

Canadians have the option of investing money using federal government registered accounts such as RRSP, TFSA or RESP, LIF, and LIRA. They are also known as Registered funds. If you are using Registered funds, you can invest in mortgages as a way to earn superior returns. The income generated from this type of mortgage investment falls under a tax shelter, which means you can earn income free of tax, or tax-deferred, depending on the type of Registered fund, thereby maximizing return. As an investor, you should be fully aware of the current tax rate and which fund is eligible for which investment from a different registered account. In this blog post, we will briefly discuss which registered account may be used and for which purpose. We recommend you seek the advice of an investment professional before making any decisions.

Eligible Registered Funds For Mortgages

  • RRSP
    Registered Retirement Saving Plan (RRSP) is a federal government account in which Canadian residents employed and self-employed can save their money on a pre-tax basis. Investment income earned in an RRSP account is not taxed and grows on a tax-free basis. With the effect of annual compounding, this makes a significant difference upon retirement. Tax is only paid when funds are withdrawn. Using an appropriate tax-efficient strategy, investors can minimize the amount they withdraw to ensure only marginal tax is deducted when money is withdrawn. The savings in an RRSP are eligible to be invested in a Mortgage Investment Corporation.
  • RRIF
    Registered Retirement Income Fund (RRIF) is a retirement saving plan for Canadians in which taxable income is deferred. Upon retirement, using the advice of an investment professional, one can move funds from their RRSP account to other plans. The savings are eligible to be invested in a Mortgage Investment Corporation.
  • LIRA
    Locked-In Retirement Account (LIRA) is similar to an RRSP account, but you cannot withdraw the money until you retire. The funds in this type of registered account are locked in. The savings in a LIRA are eligible to be invested in a Mortgage Investment Corporation.

If you are looking to grow your wealth with stable income, low volatility and earn superior returns with relatively low risk, consider a Mortgage Investment Corporation. Call us for more information.

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