RRSP Loan Calculator Canada
This RRSP loan calculator for Canada tests whether borrowing to contribute pays off: room, refund, loan interest and the net benefit at term end.
What it does
The RRSP loan calculator tests whether borrowing to top up an RRSP pays off once the refund is counted. It works out how much of the loan is actually deductible against your contribution room, what refund that produces, what the loan costs to repay, and what the contribution is worth at the end of the term.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| RRSP contribution rate of earned income | 0.18 | canada.ca | — |
| RRSP annual dollar limit | 33,810 | canada.ca | Effective 2026-01-01CRA RRSP annual dollar limit for 2026. Closed at 2026-12-31; superseded by the 2027-01-01 row (35390). audit 2026-09-23 |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Contribution room = min(earned income x 18%, CA$33,810) + carry-forward - pension adjustment; Refund = deductible contribution x marginal rate; Net benefit = RRSP value at the end of the term + refund - everything paid to the lender
How it works
Contribution room is the statutory percentage of last year's earned income, capped at the annual dollar limit, plus any carry-forward room and less the pension adjustment. Only the part of the loan that fits inside that room generates a refund. The loan is then amortised month by month at the rate you enter, with the refund optionally applied as a lump sum when it arrives, and the contribution is grown at the expected return over the same term.
Where it is used
- Deciding whether a January RRSP loan is worth taking before the contribution deadline
- Seeing how much interest the refund saves when it is put straight onto the loan
- Checking that the amount borrowed actually fits inside your contribution room
Worked example
Someone who earned CA$95,000.00 last year with no employer pension has … of room, so the full CA$15,000.00 they borrow is deductible and the refund at a marginal rate of 43.41 percent comes to …. The loan costs … a month over 24 months at 6.5 percent. Putting the refund straight onto the balance in month 3 clears the loan in … months for … in total, of which … is interest. The contribution growing at 5 percent is worth … by then, leaving a net benefit of … and nothing over the room limit at ….
What the RRSP loan calculator does
After the refund lands and the interest is paid, are you ahead? The calculator sizes the contribution room the borrowed money can be deducted against, works out the refund at your marginal rate, amortizes the loan month by month, and compares the value of the contribution at the end of the term with everything paid to the lender.
The appeal is real: you have unused room, the deadline is weeks away, the money is not in your account, and a lender will provide the contribution now against a refund that arrives in spring. The arithmetic often works, though less often than the marketing suggests, and the term of the loan makes most of the difference.
A worked example
You borrow $15,000 at 6.5% over 24 months, with $95,000 of earned income and a 43.41% marginal rate. Room is $17,100, so the whole amount is deductible and the refund is about $6,512. Applying the refund to the loan in month three clears it in 14 months, with total interest of about $443. At a 5% return the RRSP is worth about $16,538 at the end of the term, for a net benefit of about $7,606.
Stretch the same loan to 60 months and keep the refund instead, and interest rises to about $2,610. With no investment growth at all, the two-year loan leaves you about $5,475 ahead and the five-year loan about $3,902.
Room first
The refund depends on what you can deduct, and that is capped by room: 18% of last year’s earned income up to the annual dollar limit, plus carried-forward room, less any pension adjustment from an employer plan. Both the rate and the limit are parameters updated from the CRA.
Borrowing beyond your room gives no extra refund. It creates an over-contribution: no deduction, a monthly penalty on the excess above the cushion, and interest running the whole time. Check the room against your notice of assessment before you sign.
Why the term matters
An RRSP loan is a consumer instalment loan with monthly compounding, and its interest is not deductible, so every dollar is paid from after-tax income. Over a year or two at a normal rate the interest is a fraction of a refund at a marginal rate above 40%. Over five years it keeps building while the refund is long spent. Set the term to what you can realistically clear, not what makes the payment comfortable, and move it up and down to see the effect.
What the refund should do
By default the refund goes onto the loan in the month it arrives, which shortens the loan while keeping the payment the same. You can switch that off. The accounting is the same either way: the refund counts as money in and the lump sum as money out to the lender, so the only difference between the settings is the interest the lump sum saves.
Enter your combined federal and provincial marginal rate on your top dollars, not your average rate, which would understate the refund badly. Near a bracket boundary, run the calculator at both rates to bracket the answer.
Reading the net benefit
The net benefit is the RRSP value at the end of the term, plus the refund, less everything paid to the lender. Positive means the loan left you better off on your assumptions; negative means the interest outweighed the refund. A longer term also gives the contribution more time to grow before it is measured, so compare terms with the return set to zero as well. If the loan still comes out ahead with no growth, the case rests on the refund and the room, the parts you can count on.
What this calculator does not do
It flags an over-contribution but does not apply the penalty. It does not model the Home Buyers’ Plan or Lifelong Learning Plan, deducting a contribution in a later year, spousal RRSPs, or the effect of a larger deduction on income-tested benefits such as the Canada Child Benefit, which can be worth more than the refund. It assumes the whole loan is contributed at once and payments are made on schedule.
All figures are estimates based on the amounts, rates and room you enter, and this page is not financial, tax or lending advice. Confirm your room with the CRA and the loan terms with your lender before borrowing.
About This Tool: RRSP Loan
RRSP loan: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Tax year 2026
Frequently asked questions
Is an RRSP loan ever a good idea?
Is the interest on an RRSP loan tax deductible?
How much contribution room do I have?
What happens if I contribute more than my room?
Should the refund go onto the loan?
Is borrowing better than contributing monthly?
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