Canadian Smith Manoeuvre Calculator
Simulate the wealth-building potential of the Smith Manoeuvre in Canada. This strategy involves converting non-deductible mortgage debt into tax-deductible investment debt using a readvanceable mortgage (HELOC).
Projection After 10 Years
Standard Strategy
Mortgage Balance:
$-
Investment Portfolio:
$0
Net Position:
$-
Smith Manoeuvre
Mortgage Balance:
$-
HELOC Balance:
$-
Investment Portfolio:
$-
Net Position:
$-
Total Wealth Benefit
$-
How this calculation works
- Canadian Mortgage Math: Uses standard semi-annual compounding to determine your exact monthly principal and interest payments.
- The Strategy: As you pay down your mortgage principal each month, that exact amount is borrowed from your HELOC and invested.
- Tax Deductions: The interest on the HELOC is tax-deductible because it's used to generate income. We calculate the tax refund at the end of each year based on your marginal tax rate.
- Debt Servicing: In a pure Smith Manoeuvre, the tax refund and any investment dividends are applied immediately as prepayments against the non-deductible mortgage to accelerate paydown and free up more HELOC room. For simplicity, this calculator applies the annual tax refund to pay down the main mortgage.
