Mortgage Brokers across Canada know the value of a Self-Directed RRSP account for holding alternative mortgage investments. CWT offers the ability to consolidate mortgages under one account, flexible payment options, on-line inquiry and the most experienced and knowledgeable mortgage administrators in Western Canada.
What is the Difference between a Non-Arm's Length and an Arm's Length Mortgage?
The type of mortgage is dependent on the lender's relationship with the borrower or co-borrower.
A Non-Arm's Length Mortgage would be where you lend money from your RRSP to yourself as an individual or as a co-borrower with someone who is related by blood or marriage to the lender, such as a child, grandparent or even one’s self.
An Arm's Length Mortgage would be between two unrelated parties. Often the lender and the borrower have never met, and are arranged through a mortgage broker. Please see the examples below for more clarification:
Scenario 1
Unrelated clients: one looking for a mortgage, the other an investment.
You have a client who didn't qualify for a bank mortgage, but is willing to negotiate an interest rate with a third-party lender. You know of another client who has a substantial amount of cash in their RRSP and would like to invest in something fairly safe which pays regular interest payments. As long as these two clients are unrelated by blood or marriage, you can offer them both an Arm's Length Mortgage† funded through a CWT Self-Directed RRSP.
Scenario 2
Married couple looking to access their RRSPs to purchase their first home.
Your clients are a married couple who didn't qualify for a mortgage with the banks, but have a substantial amount of cash in their RRSP, which they would like to access to purchase their first home. If they require more funds than allowed through the Home Buyers Plan, you can introduce them to the Non-Arm's Length Mortgage† and offer the wife the ability to lend money as a co-borrower to her husband (or vice-versa) from a CWT Self-Directed RRSP!
And there are many more scenarios where a CWT Arm's Length &
Non-Arm's Length Mortgage can help your clients!
†Please refer to the
Arm's Length
&
Non-Arm's Length
Mortgage Packages for full terms & conditions.
Self Directed Mortgage Investments in 3 Steps
1. Setting up the Account
You will need to open one of the following accounts:
| Account Type | Required Forms | Need Help? | Additional Requirements |
| RRSP/RRIF | Self-Directed Registered Account Application | Help Guide | A locking-in agreement is required for all locked-in accounts. |
| TFSA | TFSA Application | Help Guide | Please enclose a legible copy of a government issued photo ID (see part 5 of the TFSA Application Form for more details). |
*Please note: The "Pre-Authorized Debit Agreement" portion of the New Account Application Form or the TFSA Application Form has to be completed prior to submission if there is no securities dealer appointed to the account, or if non-marketable securities are the only assets being held within the plan
Why not access your accounts online with a simple, easy to use interface that will be invaluable in tracking and maintaining your accounts. Click here for a tour of CWeb to learn how it can benefit you.
2. Funding the Account
You will need to have sufficient funds in the account to cover the purchase amount and any applicable processing fees. If funds are not available, you may:
- Make a new contribution into your CWT RRSP or TFSA by sending a cheque to our office (Please indicate "contribution" on the cheque),
- AND/OR
- Transfer funds from an existing registered account or TFSA at another institution to the CWT account.
Click here for a Transfer Authorization for Registered Investments (T2033).
Click here for a sample guide on how to complete this form.
3. Setting up the Mortgage
You will need to:
| Non-Arm's Length | Arm's Length |
Complete the “Personal (Non-Arm's Length) Mortgage Package” found here: Non-Arm's Length |
Complete the “Arm's Length Mortgage Package” found here: Arm's-Length |
Click here for a list of approved appraisers.
All paperwork should be sent to:
Canadian Western Trust
Suite 600-750 Cambie Street
Vancouver, BC
V6B 0A2
Fax: 604.669.6069
Checklist of required items:
- New Account Application or TFSA Application
- Transfer Authorization Form (T2033) or Cheque for Contribution (if applicable)
- Arm's Length and/or Non-Arm's Length Mortgage Package
Can other types of assets be held in a CWT account?
Absolutely! CWT Self-Directed Accounts allow you to consolidate different investments into one single account. In addition to Arm's Length and Non-Arm's Length Mortgages, your CWT Self-Directed Account can also hold cash, GIC's, Mutual Funds*, Stocks and Bonds**, and approved Private Securities.
This means that if you already have an RRSP(s)/RRIF(s)/TFSA(s) at another financial institution, you can easily transfer the plan(s) to CWT and consolidate all your investments into one account.
*Requires a licensed mutual fund representative appointed to the account.
**Held through a Delivery Against Payment (DAP) account with CWT's partner, Qtrade.
If you would like more information regarding CWT Self-Directed Accounts,
please call our Client Service Team at 1.800.663.1124 or email
informationservices@cwt.ca.