What is the Smith Maneuver?

The Smith Maneuver is a legal Canadian financial strategy that converts non-deductible mortgage debt into tax-deductible investment debt. It involves re-borrowing the principal paid on your mortgage via a readvanceable HELOC to invest in income-generating assets.

Which mortgages work for the Smith Maneuver?

You require a 'Readvanceable Mortgage' that automatically increases your credit limit as you pay down principal. Examples include the Scotiabank STEP, TD Home Equity FlexLine, BMO Homeowner ReadiLine, and Manulife One.

Is interest on a HELOC tax deductible in Canada?

Yes, provided the borrowed funds are used for the purpose of earning income from a business or property (like stocks, ETFs, or rental real estate). If you use the funds for personal expenses (cars, vacations), the interest is NOT deductible.

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Advanced Strategy

The Smith Maneuver™
Calculator.

Stop paying your mortgage with after-tax dollars. This institutional-grade engine models how to convert your "Bad Debt" (Mortgage) into "Good Debt" (Investment Loan) to generate tax refunds and accelerate your net worth.

Strategy Eligible

Wealth
Accelerator.

Transform your mortgage interest into a tax refund. Based on your $140,000 income, your marginal tax efficiency is 38.66%.

Projected Gain

Net Benefit (25 Years)

$1,220,560

Assets$1,820,560

Loans$600,000

1. Client Profile

Annual Household Income

Property Value

2. Mortgage Details

Current Balance

Loan-to-Value60.0%

Rate (%)

Amortization

3. The Strategy

HELOC Rate (%)

Initial Lump Sum$0

Max: $200,000

Capitalize InterestUse HELOC to pay interest

Reinvest RefundApply tax refund to mortgage

Year 1 Snapshot

Mortgage Payment$3,332

Inv. Loan Interest+$66

Total Monthly$3,398

Wealth Velocity

Est. Annual Tax Refund+$165

Refund Reinvested?Yes (Accelerated)

*Refund increases annually as your deductible loan balance grows.

30-Year Ledger

Year	Mortgage Bal	HELOC	Portfolio	Tax Refund	Mortgage P&I	HELOC Int.	Total Pmt
1	$586,524	$13,476	$14,063	+$165	$3,332	$66	$3,398
2	$572,114	$27,886	$30,255	+$482	$3,332	$136	$3,467
3	$556,703	$43,297	$48,820	+$822	$3,332	$211	$3,542
4	$540,222	$59,778	$70,027	+$1,185	$3,332	$291	$3,622
5	$522,598	$77,402	$94,172	+$1,574	$3,332	$376	$3,708
6	$503,750	$96,250	$121,579	+$1,989	$3,332	$467	$3,799
7	$483,594	$116,406	$152,608	+$2,433	$3,332	$565	$3,897
8	$462,040	$137,960	$187,651	+$2,908	$3,332	$670	$4,001
9	$438,989	$161,011	$227,143	+$3,416	$3,332	$781	$4,113
10	$414,338	$185,662	$271,558	+$3,960	$3,332	$901	$4,233
11	$387,977	$212,023	$321,421	+$4,541	$3,332	$1,029	$4,360
12	$359,786	$240,214	$377,306	+$5,162	$3,332	$1,165	$4,497
13	$329,638	$270,362	$439,843	+$5,827	$3,332	$1,312	$4,643
14	$297,398	$302,602	$509,723	+$6,537	$3,332	$1,468	$4,800
15	$262,920	$337,080	$587,706	+$7,297	$3,332	$1,635	$4,967
16	$226,050	$373,950	$674,625	+$8,110	$3,332	$1,814	$5,146
17	$186,620	$413,380	$771,391	+$8,979	$3,332	$2,005	$5,337
18	$144,453	$455,547	$879,005	+$9,908	$3,332	$2,210	$5,541
19	$99,361	$500,639	$998,563	+$10,902	$3,332	$2,428	$5,760
20	$51,138	$548,862	$1,131,264	+$11,965	$3,332	$2,662	$5,994
21	$0	$600,000	$1,277,993	+$13,101	$3,332	$2,912	$6,244
22	$0	$600,000	$1,397,868	+$13,802	$0	$2,975	$2,975
23	$0	$600,000	$1,527,692	+$13,802	$0	$2,975	$2,975
24	$0	$600,000	$1,668,291	+$13,802	$0	$2,975	$2,975
25	$0	$600,000	$1,820,560	+$13,802	$0	$2,975	$2,975
26	$0	$600,000	$1,985,467	+$13,802	$0	$2,975	$2,975
27	$0	$600,000	$2,164,061	+$13,802	$0	$2,975	$2,975
28	$0	$600,000	$2,357,479	+$13,802	$0	$2,975	$2,975
29	$0	$600,000	$2,566,950	+$13,802	$0	$2,975	$2,975
30	$0	$600,000	$2,793,807	+$13,802	$0	$2,975	$2,975

Is your mortgage tax-deductible?

The Smith Maneuver requires a specific type of "Readvanceable Mortgage" (e.g., TD FlexLine, Scotia STEP, Manulife One). Standard mortgages do not work. Let our team audit your current mortgage for eligibility.

*Consultation is free. No obligation.

Strategy Guide

How it Works
The "Plain Jane" vs. Accelerator
Compatible Mortgage Products
CRA Compliance Rules

Did you know? Canadian homeowners have over $2 Trillion in "dead equity" sitting in their homes earning 0% return.

The Mechanics of Debt Conversion

In Canada, interest on your home mortgage is not tax-deductible. It is paid with after-tax dollars. However, interest on money borrowed to earn investment income is 100% tax-deductible.

The Smith Maneuver exploits this by using a Readvanceable Mortgage. This is a special product that combines a mortgage and a Home Equity Line of Credit (HELOC).

The Cycle

1
You make your regular mortgage payment.
2
The bank automatically increases your HELOC limit by the exact amount of principal you just paid off.
3
You withdraw that equity immediately and invest it in income-producing assets (stocks, ETFs, REITs).
4
At tax time, you deduct the interest on the HELOC loan, generating a large tax refund.

Required Mortgage Products

You cannot do this with a standard mortgage. You need a lender that offers automatic readvance. At Indibrick, we work with the following compliant products:

Scotia STEP

TD Home Equity FlexLine

Manulife One

BMO ReadiLine

Risk Analysis

Leverage Risk

If the market drops, your loan balance remains the same. You can lose equity.

Interest Rate Risk

HELOCs are variable rate products. If Prime rates rise, your cost of borrowing increases, potentially offsetting investment gains.

Call Risk

Though rare, lenders can technically demand repayment of a HELOC at any time.

Audit Your Mortgage.

Most Canadians are sitting on a goldmine of tax deductions. Book a 15-minute strategy call to see if your property qualifies for the Smith Maneuver.

Request Eligibility Audit

Speak to a Smith Maneuver Certified Specialist.

The Smith Maneuver™ Calculator.

WealthAccelerator.