For many young families, the dream of owning a home today turns into a race against time. Housing prices are rising, there are few offers, and salaries are lagging behind. Against this backdrop, the Régime d’accession à la propriété (RAP), a program that allows the use of funds from retirement savings (REER) for a down payment, seems like a salvation. But behind this “salvation” may lie a long-term trap.
In 2024, the federal government increased the withdrawal limit to $60,000 per person. This money can be used without immediate taxation, and repaid to the pension fund gradually over fifteen years. At first glance, everything seems reasonable: the additional amount helps take the first step towards the home they dreamed of.
However, reality turns out to be more complicated. The money withdrawn from the REER stops “working” — it no longer generates profit. While the borrower repays it in parts, their retirement savings grow more slowly. As a result, what helped buy a home today may weaken financial protection at the threshold of retirement.
“RAP creates an illusion of affordability,” explains an independent financial consultant from Longueuil. “But it doesn’t make a home cheaper. It just allows you to pay more for the same property.”
Indeed, as the number of program participants increases, so does the pressure on prices. When more buyers have larger sums, and the market supply remains limited, real estate becomes more expensive for everyone. Thus, the personal benefit of one turns into a common problem.
Several years after the purchase, the obligation to repay the money to the REER adds to the mortgage and taxes. The budget, already strained by servicing the loan and rising utility costs, becomes even heavier. Financial stress does not disappear — it is merely postponed.
Economists note that RAP primarily helps those who already have a decent reserve in retirement savings or family assistance. For people without starting capital, the situation hardly changes: the gap between those who “enter” the market and those who remain on the sidelines becomes deeper.
Nevertheless, the program remains popular — and perhaps for human reasons. It gives a sense that there is still a chance. But experts advise treating this money as a debt, not as free assistance. After all, it will have to be repaid — and it’s better to budget for it in advance.
RAP can be a springboard to a home, but not a solution to the housing crisis. In conditions of high prices and limited supply, it rather supports a heated market than cools it down. And for buyers, the main question remains the same: how not to lose financial stability while striving for their own corner in the sun.
