Question

# 1) Neil and Sandra each borrowed from their Registered...

1) Neil and Sandra each borrowed from their Registered Retirement Savings Plan (RRSP) under the Home Buyer's Plan (HBP) for the down payment on the purchase of their first home. If Neil and Sandra withdrew the maximum that is permitted under the HBP program, and have a conventional mortgage (minimum required), what is the value of the home that they are looking to purchase?

a) $250,000

b) $275,000

c) $125,000

d) $100,000

e) $150,000

Answer & Explanation

Solved by verified expert

One person can take up to $25,000.

But since they're couples, they can take a maximum of $50,000 to help finance their down payment on a home.

Step-by-step explanation

Minimum mortgage allowed = 20%

=> if 25,000 is 20%, how much is 100%: the total value of the home?

25,000 / 0.2 = **$250,000 => A**