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Self-Directed RRSP Mortgage Lending

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Self-Directed RRSP Mortgage Lending

When thinking of making investments for retirement, a mortgage broker is likely not the first person that comes to mind. It is not common knowledge that private lending against real estate can be a lucrative and secure investment retirement strategy for the average person. Most people think mortgages are a financial instrument that is specially reserved only to banks and hedge funds. A mortgage does not have to be hundreds of thousands of dollars. There are many borrowers who require $20k - $75k but cannot qualify at the banks due to regulated lending criteria. Not only can individuals such as yourself directly execute mortgages against properties as investments, you are able to earn these great returns through registered funds such as an RRSP. 

An RRSP (Registered Retirement Savings Plan) is a specially developed account issued through an insurance, bank, or trust company and registered with the government which has incentives to encourage individuals to save for retirement. You receive income tax deductions for contributions made to your RRSP account. In addition, the investments made with your RRSP are able to grow tax free until they are withdrawn. They are an incredibly powerful way to save for retirement and can be used for private mortgages with high returns.

To lend your RRSP funds out as a mortgage you must utilize the service of a Trust company which offers the self-directed lending for registered funds in the form of mortgages. In Alberta, there are a couple of Trustee companies available which allow you to utilize your RRSP and other registered accounts such as TFSA, RIF, LIF for mortgage lending. You can enjoy all the tax benefits of your registered savings but be in control and self direct your investment rather than leaving it to the stock markets and mutual funds. 

You can transfer some or all of your existing RRSP into a trust company account and utilize this money for private lending. There is no restriction on you to keep your entire RRSP in one account or institution. You can have multiple RRSP accounts with through multiple institutions.  A trust company will handle all the administration and reporting that is required for your RRSP just like the service you are used to receiving from your bank. In addition, they will handle the mortgage administration tasks such as taking automatic payments, completing payout balances, and other reporting duties for you.

When you request the transfer of registered funds from your bank to a trust company, they will typically use the maximum allowed time by law to keep your money in their accounts. The transfer can take up to thirty days and you will likely be contacted by their heavily trained retention specialists in with efforts and scare tactics to convince you to keep money in their institution. Banks must operate within certain parameters set out by federal regulations and sometimes their employees do not even have much thought outside them. It can be very lucrative to think outside the banker’s box.

Working with a mortgage broker can expose you to investments secured against real property and have much higher rates of return than you may expect. You are in full control of your money and always decide exactly who and what property you lend against. Join our private lending network for free and start receiving lending opportunities today!

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