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 Optimizer
In Canada, mortgage interest isn't tax-deductible. The Smith Manoeuvre solves this by gradually converting your standard mortgage into a tax-deductible investment loan, generating annual tax refunds and accelerating your wealth.
The Essentials
Total Net Worth
$1,180,132
Extra Wealth Created
+$430,132
Portfolio Built
$1,507,092
Total Out-of-Pocket Cost
$0
Net Worth Projection
25 Year Strategy Lifecycle
Strategy Liquidity
$0
Total cash flow extracted from dividends
Total Net Worth Advantage
$430,132
Projected wealth increase over standard home ownership.
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 |
|---|---|---|---|---|---|---|---|---|
| 1 | $488,858 | $11,478 | $0 | $144 | $88 | $261,142 | $261,297 | +$155 |
| 2 | $477,208 | $24,246 | $0 | $481 | $297 | $272,792 | $273,475 | +$684 |
| 3 | $465,029 | $38,416 | $0 | $856 | $535 | $284,971 | $286,623 | +$1,652 |
| 4 | $452,295 | $54,106 | $0 | $1,271 | $806 | $297,705 | $300,839 | +$3,134 |
| 5 | $438,982 | $71,443 | $0 | $1,730 | $1,113 | $311,018 | $316,232 | +$5,213 |
| 6 | $425,063 | $90,565 | $0 | $2,238 | $1,460 | $324,937 | $332,919 | +$7,982 |
| 7 | $410,510 | $111,621 | $0 | $2,796 | $1,850 | $339,490 | $351,034 | +$11,544 |
| 8 | $395,296 | $134,769 | $0 | $3,411 | $2,289 | $354,704 | $370,719 | +$16,015 |
| 9 | $379,389 | $160,180 | $0 | $4,087 | $2,780 | $370,611 | $392,132 | +$21,521 |
| 10 | $362,758 | $188,039 | $0 | $4,828 | $3,330 | $387,242 | $415,448 | +$28,206 |
| 11 | $345,370 | $218,544 | $0 | $5,640 | $3,945 | $404,630 | $440,858 | +$36,228 |
| 12 | $327,191 | $251,906 | $0 | $6,529 | $4,629 | $422,809 | $468,570 | +$45,762 |
| 13 | $308,185 | $288,354 | $0 | $7,500 | $5,391 | $441,815 | $498,815 | +$57,000 |
| 14 | $288,314 | $328,135 | $0 | $8,561 | $6,237 | $461,686 | $531,843 | +$70,157 |
| 15 | $267,539 | $371,511 | $0 | $9,718 | $7,176 | $482,461 | $567,932 | +$85,471 |
| 16 | $245,818 | $418,766 | $0 | $10,980 | $8,217 | $504,182 | $607,383 | +$103,201 |
| 17 | $223,109 | $470,205 | $0 | $12,353 | $9,369 | $526,891 | $650,528 | +$123,637 |
| 18 | $199,366 | $526,152 | $0 | $13,848 | $10,643 | $550,634 | $697,728 | +$147,094 |
| 19 | $174,543 | $586,959 | $0 | $15,473 | $12,049 | $575,457 | $749,381 | +$173,924 |
| 20 | $148,591 | $653,003 | $0 | $17,239 | $13,601 | $601,409 | $805,919 | +$204,510 |
| 21 | $121,457 | $724,686 | $0 | $19,156 | $15,311 | $628,543 | $867,818 | +$239,275 |
| 22 | $93,088 | $802,441 | $0 | $21,236 | $17,195 | $656,912 | $935,596 | +$278,685 |
| 23 | $63,429 | $886,734 | $0 | $23,492 | $19,268 | $686,571 | $1,009,819 | +$323,248 |
| 24 | $32,420 | $978,062 | $0 | $25,937 | $21,548 | $717,580 | $1,091,106 | +$373,526 |
| 25 | $0 | $1,076,960 | $0 | $28,586 | $24,052 | $750,000 | $1,180,132 | +$430,132 |
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.