I am a first time home buyer and am thinking of making use of the HBP (Home Buyer's Plan). I have $35,000 in RRSP contribution limit. I am planning to deposit $25,000 into my RRSP account and $10,000 into the RRSP account of my spouse (spousal RRSP). I want to be able to withdraw $35,000 through the HBP plan. However my employer also makes upto 4% in matching contribution to my RRSP with every paycheque.
My question is that if I make the $35,000 deposit into the RRSP, I would have exhausted my contribution limit for the current year. If after this I contribute 4% of my paycheque every month into my RRSP along with a matching 4% from my employer, I will be exceeding my contribution limit for this year. Can I show this amount as a repayment for the HBP loan I took in this same year?
If the above option is not possible then I will be left with two options:-
1) Deposit less money into my RRSP account to begin-with so that the monthly contributions don't exceed my contribution limit. In this case I will only be able to make use of an amount which is less than my RRSP contribution limit.
2) Stop the 4% contribution as soon as I deposit the $35,000. In this case I will be loosing out on the 4% free money from the employer!