- New tax-advantaged registered savings plan for first-time home buyers that combines the benefits of RRSPs and TFSAs
- BMO Real Financial Progress Index reveals that among those planning to use a home buyer assistance program, 21 per cent plan to use a FHSA to purchase their first home
TORONTO, Nov. 6, 2023 /CNW/ - BMO today announced the launch of its First Home Savings Account (FHSA), a new tax-advantaged registered savings plan that empowers Canadians to invest and save towards the down payment on their first home.
The FHSA combines the benefits of a Registered Retirement Saving Plan (RRSP) and a Tax-Free Savings Account (TFSA). FHSA contributions are tax deductible, earnings are tax-sheltered, and withdrawals are tax-free when used towards qualified first-time home purchases. First-time home buyers can contribute up to $8,000 a year, with a lifetime contribution limit of $40,000.
"Homeownership continues to be important to real financial progress, security and wealth creation for many Canadians and their families. We are excited to offer first-time home buyers more flexible paths to home ownership, including tax-efficient strategies that allow them to put their investments to work and effectively grow their savings for their down payments," said Nicole Ow, Head, Retail Investments, BMO. "We encourage customers to work with a professional advisor to help them understand the investment opportunities available and create a personalized plan to help them make progress towards their financial goals."
According to insights from the BMO Real Financial Progress Index, among the 46 per cent of Canadians who are planning on using home buyer assistance programs, 21 per cent plan on using the FHSA for their home purchase. However, only 38 per cent of Canadians are aware of the account's features and benefits. Customers can learn more about FHSAs and set up an account in a BMO branch, over the phone or through their investment advisor.
BMO also offers tools and resources to help customers throughout their homebuying journey:
- BMO SmartProgress: Customers can learn more about FHSAs in a new learning module available in BMO SmartProgress' homeownership playlist. BMO SmartProgress is an online education platform where Canadians can learn more about how to manage their finances.
- Pre-Approval: For homebuyers, getting pre-approved provides a cushion for due diligence when purchasing a home. In addition to visiting a local branch to speak with an advisor, BMO allows homebuyers to apply for mortgage pre-approval online. To give extra time for house hunting, BMO offers the longest rate guarantee period at 130 days of any major Canadian bank (as of September 5, 2023).
- Pre-Qualification: To get started with their homebuying journey, prospective homebuyers can get a mortgage estimate in one minute with a 130-day rate hold. Using a soft credit check that will not affect their credit scores, customers will be able to know how much they can potentially afford for a home based on information such as income, assets and debt.
For more information about BMO's FHSAs, please visit: www.bmo.com/fhsa.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.25 trillion as of July 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.
SOURCE BMO Financial Group