Smith Manoeuvre Estimator
Convert your non-deductible mortgage interest into a tax-deductible investment loan. Accelerate your wealth building using the standard Canadian re-advanceable mortgage strategy.
Smith Manoeuvre
Debt Conversion Strategy
Strategy Presets
The Essentials
Total Net Worth
$877,051
Extra Wealth Created
+$277,051
Portfolio Built
$747,481
Total Out-of-Pocket Cost
$80,430
Strategy Impact Summary
By following this strategy, you could be mortgage-free0.0 years soonerthan a standard mortgage.
You'll build a $747,481 investment portfolio while generating an average annual tax refund of $3,591.
Net Worth Projection
25 Year Strategy Lifecycle
Debt Conversion
Non-Deductible vs Deductible Debt
Year-by-Year Financial Audit
Detailed breakdown of debt conversion and growth
| Year | Mortgage Balance | HELOC Balance | Out-of-Pocket Interest | Annual Tax Refund | Annual Dividends | Standard Net Worth | Smith Net Worth | Net Benefit |
|---|---|---|---|---|---|---|---|---|
| 0 | $400,000 | $0 | $0 | $0 | $0 | $200,000 | $200,000 | +$0 |
| 1 | $391,086 | $9,140 | $0 | $66 | $70 | $208,914 | $209,030 | +$116 |
| 2 | $381,767 | $19,212 | $0 | $234 | $236 | $218,233 | $218,760 | +$527 |
| 3 | $372,023 | $30,287 | $0 | $419 | $423 | $227,977 | $229,257 | +$1,281 |
| 4 | $361,836 | $42,441 | $0 | $622 | $634 | $238,164 | $240,597 | +$2,433 |
| 5 | $351,186 | $55,756 | $0 | $845 | $871 | $248,814 | $252,859 | +$4,045 |
| 6 | $340,050 | $70,319 | $0 | $1,089 | $1,136 | $259,950 | $266,133 | +$6,183 |
| 7 | $328,408 | $86,223 | $0 | $1,356 | $1,433 | $271,592 | $280,516 | +$8,924 |
| 8 | $316,237 | $103,567 | $0 | $1,647 | $1,764 | $283,763 | $296,113 | +$12,350 |
| 9 | $303,511 | $122,458 | $0 | $1,964 | $2,132 | $296,489 | $313,042 | +$16,553 |
| 10 | $290,206 | $143,008 | $0 | $2,309 | $2,542 | $309,794 | $331,429 | +$21,635 |
| 11 | $276,296 | $165,338 | $0 | $2,685 | $2,996 | $323,704 | $351,412 | +$27,708 |
| 12 | $261,753 | $189,577 | $0 | $3,093 | $3,499 | $338,247 | $373,142 | +$34,895 |
| 13 | $246,548 | $215,861 | $0 | $3,535 | $4,055 | $353,452 | $396,785 | +$43,333 |
| 14 | $230,651 | $244,338 | $0 | $4,015 | $4,669 | $369,349 | $422,519 | +$53,171 |
| 15 | $214,031 | $265,969 | $0 | $4,499 | $5,304 | $385,969 | $450,476 | +$64,507 |
| 16 | $196,654 | $283,346 | $0 | $4,820 | $5,812 | $403,346 | $480,518 | +$77,172 |
| 17 | $178,487 | $301,513 | $0 | $5,132 | $6,338 | $421,513 | $512,757 | +$91,244 |
| 18 | $159,493 | $320,507 | $0 | $5,459 | $6,901 | $440,507 | $547,352 | +$106,845 |
| 19 | $139,635 | $340,365 | $0 | $5,800 | $7,506 | $460,365 | $584,470 | +$124,104 |
| 20 | $118,872 | $361,128 | $0 | $6,157 | $8,155 | $481,128 | $624,292 | +$143,164 |
| 21 | $97,165 | $382,835 | $0 | $6,531 | $8,852 | $502,835 | $667,011 | +$164,177 |
| 22 | $74,471 | $390,000 | $16,080 | $6,854 | $9,613 | $525,529 | $713,075 | +$187,546 |
| 23 | $50,743 | $390,000 | $21,450 | $6,882 | $10,407 | $549,257 | $763,252 | +$213,995 |
| 24 | $25,936 | $390,000 | $21,450 | $6,882 | $11,247 | $574,064 | $817,818 | +$243,754 |
| 25 | $0 | $390,000 | $21,450 | $6,882 | $12,145 | $600,000 | $877,051 | +$277,051 |
How the Smith Manoeuvre Works
Step 1: Re-advancing
As you make your regular mortgage payment, the principal portion is "re-advanced" into a Home Equity Line of Credit (HELOC).
Step 2: Investing
The money from the HELOC is invested in income-producing assets (like stocks or ETFs), making the interest on that loan tax-deductible.
Step 3: Tax Refunds
The tax deductions generate annual refunds, which you can use to pay down your mortgage even faster, accelerating the cycle.
Step 4: Debt Conversion
Eventually, your entire non-deductible mortgage is converted into a fully deductible investment loan, improving your net worth.