RRSP Loan Calculator

See if the tax refund from an RRSP loan outweighs the interest cost.

RRSP Loan Amount

Loan Interest Rate

Repayment Period

months

Marginal Tax Rate

Apply tax refund to loan

Reduces your balance and interest cost

Tax Refund

from contribution

Total Interest

cost of borrowing

Monthly Payment

for {{ monthsStr }} months

Cost-Benefit Summary

RRSP Contribution (loan amount){{ loanStr }}

Tax Refund Generated+{{ refundStr }}

Total Interest Paid−{{ interestStr }}

Net Benefit (Refund − Interest){{ netStr }}

Total Repaid Over Loan{{ totalRepaidStr }}

Net Benefit at Different Loan Amounts

LoanRefundInterestNet

Note: RRSP loan interest is not tax-deductible. This calculator compares the one-time tax refund against the interest cost of borrowing. Applying your refund to the loan principal reduces total interest. The best outcome is a short repayment period and a low rate — ideally repaid before the next RRSP season. The bigger long-term benefit is the tax-sheltered growth of the contribution itself.

Does an RRSP Loan Make Sense?

An RRSP loan lets you borrow to make a contribution you couldn’t otherwise afford — generating an immediate tax refund. The strategy works best when the refund clearly exceeds the interest cost of the loan, and when you can repay quickly (ideally within a year). A common approach is to apply your tax refund directly against the loan principal, cutting the interest you pay.

Keep in mind that RRSP loan interest is not tax-deductible. The real long-term value isn’t just the refund — it’s getting money into a tax-sheltered account sooner, where it can compound for decades. But if the loan rate is high or the repayment period is long, the interest can erode much of the benefit.

Disclaimer: This calculator compares the one-time tax refund against total loan interest using the marginal rate you select. It does not model the long-term investment growth of the contribution, nor changes to your tax situation. RRSP loan interest is not deductible. Borrowing to invest carries risk. Consult a financial advisor before taking an RRSP loan.

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