Leverage Calculators

Smith Manoeuvre.

Model the Smith Manoeuvre to convert your non-deductible Canadian mortgage into tax-deductible investment debt. See projected portfolio growth, tax refunds, and net benefit over your amortization.

Inputs

Mortgage

Home value

Mortgage balance

Mortgage rate

Amortization

HELOC & investment

HELOC rate

Expected return

Dividend yield

Province

Advanced

Annual income

Used for marginal tax rate.

Re-invest tax refunds into portfolio

Investment management fee

MER or advisor fee deducted from returns.

Result

Fill the form and press Calculate.

What is the Smith Manoeuvre?

The Smith Manoeuvre is a Canadian financial strategy that converts non-deductible mortgage debt into tax-deductible investment debt. It requires a readvanceable mortgage — as you pay down principal, your HELOC limit grows. You immediately re-borrow that principal from the HELOC and invest in income-producing assets. The HELOC interest is tax-deductible under paragraph 20(1)(c) of the Income Tax Act, claimed on line 22100, generating a tax refund.

Risks: investment losses, rising HELOC rates, CRA challenge if borrowed funds are not used to earn income. Always maintain a paper trail and invest in eligible income-producing assets.

Disclaimer

Educational estimates only. The Smith Manoeuvre involves significant financial risk. Consult a licensed financial advisor, tax professional, and mortgage broker before implementing.