# Holding a 2nd mortgage in TFSA?



## Baigle (Sep 19, 2012)

Anybody know if this is possible? Say I lend out 25k from my TFSA as a 2nd mortgage. What account will let me do this? Can I have the payments deposited into the account and cause my limit to go up or I have to take the payments out?

I was thinking about this and thought it would be a good idea to get tax free income with small risk. Just wondering how to go about doing this.

Edit: It looks like B2B will do it since they also allow you to hold 2nd mortgages in RRSPs. I am just wondering about the details.

If I lend somebody 20k at say 12% and they pay me back 200$ a month. Would the 200/month go back into the tfsa and increase my limit? Say my tfsa limit is 20k, if I lend out 20k but charge 1000$ fee to setup this loan, so the loan is actually 21k. When they pay me back the 21k would my new limit be 21k? plus the interest I was getting every month?


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## Eclectic12 (Oct 20, 2010)

I too have heard about mortgages being in an RRSP - though if this is a second mortgage, is this really low risk?

The articles for mortgages in an RRSP highlight that:

a) the fees are high (i.e. it is more costly than a regular mortgage).

b) the interest rate has to be competitive to the going rates.

c) there is limited flexibility. If your cash flow situation changes - there is limited room for flexibility on payments. The way the article put it was that if the mortgage payments are missed, the bank holding the RRSP can foreclose on the house.


I'm repeating what I've read from memory - so make sure you discuss this with the appropriate professionals.


http://www.boomerandecho.com/pros-and-cons-of-holding-your-mortgage-in-your-rrsp/


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## Baigle (Sep 19, 2012)

I should of wrote low risk to me. I work in the industry and can choose 2nd mortgages that have a low loan to value or where the client has very low risk profile.


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## Quotealex (Aug 1, 2010)

I thought it was no longer possible to put a mortgage into an RRSP! Up until, you could still set it with TD, but not anymore....


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## Cal (Jun 17, 2009)

I am of the impression that you can still do it within an RRSP, but you cannot within a TFSA.


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## Kail (Feb 7, 2012)

TD stopped providing that service. Canadian Western Trust & Olympia Trust both allow you to do this though. It is RRSP only though.


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