Planning for Retirement: How to Use Your Home Equity to Reduce Taxes
Planiprêt
Jan 12, 2026
Retirement is a crucial stage that requires smart financial planning. Most of the time, we immediately think of our RRSPs, TFSAs, or other investments to ensure security. However, one powerful tool is often overlooked: the home equity you’ve built up over the years.
Why is home equity so valuable?
Over time, your home appreciates in value while you pay down your mortgage. This creates home equity, the portion of your property you truly own. This equity can be accessed through a Home Equity Line of Credit (HELOC).
Unlike withdrawing directly from your RRSP, using a HELOC to cover certain retirement needs can help you reduce your tax burden. Every dollar withdrawn from an RRSP is taxable, which can quickly increase your tax bill. In contrast, a HELOC gives you access to funds without triggering taxes, while keeping your investments sheltered.
The tangible benefits
- Financial flexibility
Borrow only what you need, when you need it. - Competitive interest rates
HELOCs generally offer lower rates than personal loans or credit cards. - Tax optimization
Fewer taxable withdrawals mean more money stays in your pocket.
This strategy can be particularly useful for one-time expenses such as home renovations, travel, or even unexpected medical costs—without compromising your long-term savings.
A tool to include in your retirement plan
Of course, this approach should be evaluated based on your overall situation: property value, income, goals, and risk tolerance. That’s why it’s essential to consult a mortgage broker before making a decision.
Thinking about planning your retirement wisely?
Contact your mortgage broker today to explore how your home equity can become a strategic lever in your financial plan.
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