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.
Strategy Presets
The Essentials
Strategy Impact Summary
By following this strategy, you could be mortgage-free0.0 years soonerthan a standard mortgage.
You'll build a $1,223,856 investment portfolio while generating an average annual tax refund of $6,602.
Total Net Worth
$1,187,460
Extra Wealth Created
+$437,460
Portfolio Built
$1,223,856
Total Out-of-Pocket Cost
$298,897
Net Worth Projection
25 Year Strategy Lifecycle
Debt Conversion
Non-Deductible vs Deductible Debt
Strategy Liquidity
$0
Total cash flow extracted from dividends
Total Net Worth Advantage
$437,460
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 |
|---|---|---|---|---|---|---|---|---|
| 0 | $500,000 | $0 | $0 | $0 | $0 | $250,000 | $250,000 | +$0 |
| 1 | $488,858 | $11,478 | $0 | $120 | $88 | $261,142 | $261,273 | +$130 |
| 2 | $477,208 | $24,246 | $0 | $427 | $295 | $272,792 | $273,394 | +$602 |
| 3 | $465,029 | $38,416 | $0 | $769 | $532 | $284,971 | $286,447 | +$1,476 |
| 4 | $452,295 | $54,106 | $0 | $1,148 | $800 | $297,705 | $300,525 | +$2,820 |
| 5 | $438,982 | $71,443 | $0 | $1,568 | $1,103 | $311,018 | $315,728 | +$4,710 |
| 6 | $425,063 | $90,565 | $0 | $2,030 | $1,445 | $324,937 | $332,167 | +$7,230 |
| 7 | $410,510 | $111,621 | $0 | $2,541 | $1,829 | $339,490 | $349,966 | +$10,477 |
| 8 | $395,296 | $134,769 | $0 | $3,102 | $2,260 | $354,704 | $369,258 | +$14,554 |
| 9 | $379,389 | $160,180 | $0 | $3,719 | $2,743 | $370,611 | $390,191 | +$19,580 |
| 10 | $362,758 | $188,039 | $0 | $4,396 | $3,282 | $387,242 | $412,927 | +$25,685 |
| 11 | $345,370 | $218,544 | $0 | $5,137 | $3,884 | $404,630 | $437,642 | +$33,012 |
| 12 | $327,191 | $251,906 | $0 | $5,949 | $4,553 | $422,809 | $464,532 | +$41,724 |
| 13 | $308,185 | $288,354 | $0 | $6,836 | $5,298 | $441,815 | $493,811 | +$51,996 |
| 14 | $288,314 | $311,686 | $0 | $7,673 | $6,023 | $461,686 | $525,567 | +$63,881 |
| 15 | $267,539 | $332,461 | $15,781 | $8,205 | $6,674 | $482,461 | $559,978 | +$77,516 |
| 16 | $245,818 | $354,182 | $22,252 | $8,748 | $7,635 | $504,182 | $598,287 | +$94,105 |
| 17 | $223,109 | $376,891 | $23,693 | $9,315 | $8,705 | $526,891 | $640,925 | +$114,034 |
| 18 | $199,366 | $400,634 | $25,200 | $9,907 | $9,876 | $550,634 | $688,298 | +$137,665 |
| 19 | $174,543 | $425,457 | $26,775 | $10,527 | $11,157 | $575,457 | $740,845 | +$165,388 |
| 20 | $148,591 | $451,409 | $28,422 | $11,175 | $12,556 | $601,409 | $799,038 | +$197,628 |
| 21 | $121,457 | $478,543 | $30,143 | $11,852 | $14,084 | $628,543 | $863,388 | +$234,845 |
| 22 | $93,088 | $487,500 | $31,569 | $12,439 | $15,651 | $656,912 | $934,312 | +$277,401 |
| 23 | $63,429 | $487,500 | $31,688 | $12,490 | $16,984 | $686,571 | $1,011,710 | +$325,139 |
| 24 | $32,420 | $487,500 | $31,688 | $12,490 | $18,376 | $717,580 | $1,095,946 | +$378,366 |
| 25 | $0 | $487,500 | $31,688 | $12,490 | $19,865 | $750,000 | $1,187,460 | +$437,460 |
Extra Wealth
$437,460
Portfolio
$1,223,856
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.