Elevate Your Client Conversations This RRSP Season With Mortgages

As RRSP season kicks off, you’ll likely connect with most of your clients in the coming weeks. RRSP and tax season is your golden opportunity to go beyond retirement and tax savings and dig into what’s likely top of mind for them: their mortgage. 🏡

Make Every Client Touchpoint Count

During your RRSP discussions, take a moment to collect key mortgage details:

✅ Renewal dates – A proactive mortgage strategy could save them thousands.
✅ Plans to buy a new property – First-time homebuyers and investors need the right financing guidance.
✅ Need for refinancing – Clients may be looking to consolidate debt or leverage home equity.

Addressing these questions can help you uncover ways to strengthen your client relationships and add value to their financial plans.

The good news? nesto can help protect your clients from the banks by offering competitive mortgage solutions that align with their financial goals.

Protect Your Clients From the Banks

Here’s the reality: banks focus on their bottom line, not your clients’.

With interest spreads at record highs, lenders aren’t passing on all the benefits of falling bond yields. That means your clients may be losing thousands of dollars that would be better allocated to their investments, shaving years off their financial goals. That’s where nesto comes in.

We specialize in finding the best mortgage solutions for your clients that align with their financial goals rather than profits.

Helping your clients with their mortgage needs is more than saving them money.

🔹 It’s about protecting their assets.
🔹 It’s about securing their financial future.
🔹 And it’s about reinforcing the trust they have in you.

Mortgage Interest Deduction: A Smart Tax Strategy for Your Clients

Mortgage interest may be tax-deductible for clients who own rental properties or use part of their home for income generation. Conducting a tax efficiency review is an excellent opportunity to help them lower their tax burden while optimizing their financial strategy.

Who Can Benefit from Mortgage Interest Deductions?

✅ Clients with rental properties: Mortgage interest on a fully rented property is 100% tax-deductible.
✅ Clients renting out part of their home: If they rent out a basement apartment, a room, or a portion of their home, they can deduct the interest proportional to the space rented.
✅ Self-employed clients working from home: A portion of the mortgage interest can be deducted if their home is used for business or professional purposes.
✅ Short-term rental owners: Those who rent their property short-term or seasonally can deduct mortgage interest for the portion of the time it is rented out.

How This Ties Back to RRSP Season

Encourage clients to use potential tax savings from mortgage interest deductions to:
🔹 Boost their RRSP contributions for even more tax benefits.

🔹 Pay down their mortgage principal faster, reducing long-term interest payments.

🔹 Invest in wealth-building opportunities that align with their financial goals.

A Strategic Borrowing-to-Get-Ahead Approach: The Smith Manoeuvre

For those high-net-worth (HNW) or investment-savvy clients, the Smith Manoeuvre is a strategy for converting mortgage debt into tax-deductible investment loans. Clients can offset mortgage interest expenses by borrowing against home equity to invest while growing their investment portfolio.

Tax Planning Efficiency: A Strategic Review for 2024

RRSP season isn’t just about maximizing contributions—it’s also an opportunity to optimize tax efficiency for 2024 and beyond.

A Proactive Tax Strategy: More Than Just RRSPs

The conversations you have now can set the foundation for smarter tax planning all year round. While helping clients finalize their 2024 RRSP contributions (deadline: March 3, 2025), consider reviewing their entire tax strategy for additional opportunities:

🔹 Review 2023 tax decisions – Were there missed opportunities? Could deductions be better optimized this year?

🔹 Tax-loss harvesting – Though the deadline for 2024 tax-loss sales is months away, it’s not too early to identify assets that may benefit from a strategic sale later in the year.

🔹 Charitable donations – Clients donating sporadically throughout the year may benefit from consolidating multiple donations into a single donation during the year to maximize tax credits.

🔹 First Home Savings Account (FHSA) contributions – If a client (or their family) is saving for a first home, the FHSA combines tax-deductible contributions with tax-free withdrawals for home purchases.

🔹 Income splitting & spousal RRSPs – If clients have uneven income levels, contributing to a spousal RRSP could help reduce future tax burdens.

🔹 Tax-efficient withdrawals – For clients nearing or in retirement, reviewing RRIF and pension income withdrawal strategies now could reduce tax liabilities later.

Why This Matters

Taking the time now for a tax planning efficiency review ensures:

✅ More control over tax obligations throughout 2025.
✅ Fewer surprises during tax season next year.
✅ Increased tax savings, allowing clients to allocate funds toward mortgages, investments, discretionary or lifestyle goals.

Bridging Investment & Mortgage Conversations

Use these guiding points to transition into mortgage discussions while providing holistic financial advice:

🔹 Tax-Free Savings Account (TFSA)
Are clients hesitant about investing in a volatile market? A First Home Savings Account (FHSA) might be a better use of their savings if they plan to buy their first home. If they’re holding cash in their TFSA, it could also be repurposed for a down payment.

🔹 First Home Savings Account (FHSA)
If a client is saving for their first home, remind them that keeping FHSA funds in safe, liquid investments ensures they’re ready when the right property comes along. A conversation about mortgage planning now can set them up for a smooth homebuying process later.

🔹 Registered Retirement Savings Plan (RRSP)
Encourage long-term investing, but remind clients that they can use up to $35,000 from their RRSP for a down payment through the Home Buyers’ Plan (HBP). If a client plans to purchase their first home, RRSP contributions now could lead to tax refunds that help boost their down payment later (90 days after deposit).

🔹 Registered Retirement Income Fund (RRIF)
For clients approaching or in retirement, managing cash flow is key. Downsizing or leveraging home equity through a strategic mortgage or HELOC can help them access additional funds without disrupting their investment portfolio.

🔹 Registered Education Savings Plans (RESPs)
Parents looking to fund their child’s education may want to refinance their mortgage instead of selling off investments at the wrong time. Suggest exploring low-rate mortgage or HELOC solutions that keep their wealth strategy intact.

Consolidating Your Client’s Tax-Free and Tax-Deferred Strategies Toward Their Homeownership Goal

The Tax-Free First Home Savings Account (FHSA) is a powerful tool financial advisors can leverage to guide clients toward homeownership while optimizing their tax advantages. A strategic approach involves encouraging clients to use their RRSP tax refund to fund their FHSA—maximizing both benefits. By contributing to an RRSP before the March 3, 2025 deadline, clients can direct their tax refund into their FHSA for the following year. This ensures they take full advantage of tax deductions while building home savings. Advisors should also highlight the RRSP-to-FHSA transfer strategy, which allows clients to move funds tax-free without the Home Buyers’ Plan (HBP) repayment obligations—a key differentiator for clients deciding between the two options. Additionally, incorporating FHSA contributions can provide additional tax relief, particularly for those holding appreciated assets, while advising clients with losses to sell first and contribute the cash to claim their capital loss.

Another key sales tactic is emphasizing the long-term investment strategy within an FHSA. Since the account can remain open for 15 years, advisors can position it as a growth vehicle, encouraging higher-risk investments in the early years (e.g., equities) and a gradual shift to safer assets (e.g., fixed income or cash equivalents) as the home purchase approaches. This tailored investment approach aligns with client timelines and enhances the value proposition. Moreover, financial advisors can educate clients about FHSA eligibility, particularly those who already own rental properties or secondary residences like cottages but still qualify as first-time homebuyers under the right conditions. Positioning the FHSA as both a tax-efficient savings tool and a flexible investment vehicle allows advisors to engage clients at various stages of their homeownership journey while differentiating their expertise in the market.

Make It Easy with nesto

By partnering your client’s mortgage strategy with nesto, you’ll:

✅ Offer competitive mortgage rates customized to your clients’ needs.
✅ Deliver unbiased, goal-oriented mortgage advice.
✅ Seamlessly integrate mortgage planning into your client conversations.

Don’t miss the chance to elevate your RRSP discussions by including mortgage advice. Reach out to learn how your nesto sales coach could help you protect your clients and grow their financial success.

---

Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

---