Should you leave corporate savings in your company? + MORE Mar 6th

Compared to other mortgage products in Canada, five-year variable-rate mortgages are very attractive when market interest rates are low, as they have been for the last several years. Though historically less popular with Canadians than five-year fixed-rate mortgages, variable-rate mortgages offer the possibility of cost savings for home buyers who can tolerate a degree of fluctuation in market interest rates over their five-year terms. But, like all mortgage products, they do have their drawbacks.

Here’s how five-year variable mortgage rates work and how to know if they are the right fit for your finances. And before signing a mortgage contract, learn more about how they compare to five-year fixed mortgage rates.

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What is a five-year variable mortgage rate? 

As the name implies, a five-year variable-rate mortgage comes with a mortgage term of five years—that’s the duration for which your mortgage contract remains in effect…

I have $1 million accumulated in my corporate account. I don’t need that money for my corporation. What is the best way to take that money out with minimal tax? I’m 39 and I’m not planning to retire soon.—Chris

Withdrawing money from a corporation to invest

One of the first things to identify here, Chris, is your goal behind withdrawing the money from your corporate bank account. If you want to invest it, you can open a corporate investment account and transfer the funds into it. This way, the money stays within the corporation, and it won’t be considered a taxable withdrawal. The personal tax that can be deferred by leaving corporate savings in a corporation can be more than 40%. This is a compelling reason to incorporate your business and to accumulate savings within it.

Given the potential investment income from a $1-million corporate investment account, I should mention that recently introduced corporate tax changes may impact the taxation of your business income after you invest the funds…