The Smith Manoeuvre in Canada — Strategy & Calculator

The Smith Manoeuvre — make your mortgage work like an investment

In Canada, your home-mortgage interest isn't tax-deductible — but interest on money borrowed to invest is. The Smith Manoeuvre steadily converts one into the other, so you finish mortgage-free

holding an investment portfolio. Here's how it works, honestly — including the risks — plus a calculator to model your own numbers.

— a mortgage bundled with a home-equity line of credit (HELOC) whose limit automatically grows as you pay down principal. Every principal dollar you repay frees a dollar of credit you re-borrow to invest. The interest on

borrowing is tax-deductible under the Income Tax Act (s.20(1)(c)).

borrowing cost. It's leverage — it magnifies gains and losses.

Model your own scenario. All figures are hypothetical illustrations based on your inputs — not a forecast or advice.

Net worth — with vs. without the Manoeuvre

This is a leveraged strategy. It suits stable, higher-income earners with a long horizon (20–30 years), real risk tolerance, and investing discipline — and it is

the strategy needs, and walk you through how it works. Pair us with your own investment advisor and accountant for the pieces outside our lane.

This page and calculator are provided by RateStreet for

. They are not tax, legal, accounting, investment, or financial advice, and are not an offer of any security or investment. The Smith Manoeuvre is a

Smith Manoeuvre Calculator (Canada) — Make Your Mortgage Tax-Deductible | RateStreet

What the Smith Manoeuvre is, how it works, and a free calculator. See how a readvanceable mortgage can convert your non-deductible mortgage interest into tax-deductible investment-loan interest — with year-by-year results. Also spelled Smith Maneuver.

Interest on the investment borrowing is tax-deductible — so you get an annual refund.

Redirect refunds (and distributions) to pay the mortgage faster, freeing more room to invest.

The old non-deductible mortgage becomes a fully-deductible investment loan — and you hold a portfolio.

You're borrowing to invest. A market drop while you owe the full HELOC can wipe out the investment gains — and then some.

The strategy fails if you panic-sell in a downturn, spend the distributions, or use the HELOC for anything but qualifying investments.

Interest is only deductible if every borrowed dollar is traced to an income-producing investment and the loan is kept separate. Get this wrong and the deduction can be denied.