The Tax Deductible Mortgage Pan

Almost 40 years ago, a financial planner in Victoria, BC began showing Canadian home owners how to make the interest on their mortgage tax deductible. His name was Fraser Smith and he named the strategy "The Smith Manoeuvre."

It has been challenged and tested by Revenue Canada and it passes the test.

If you make regular monthly contributions to a non RRSP investment portfolio you could use those contributions to make part of the interest on your mortgage tax deductible.

Here is a dumbed down version. Before you contribute to your investment, take the amount of your investment contribution, and apply it to the mortgage on your home, once you do that, borrow the same amount back by way of a secured line of credit, and then invest that money. The amount of interest you pay on the money you borrowed becomes a tax deduction. Interest on money borrowed to invest is a legitimate tax deduction.

Over time you could reap the benefits of thousands of dollars in tax deductions and have a portfolio that grows. Remember, I said this was a dumbed down explanation. The ability to do this with your mortgage requires you to have the right kind of mortgage and that is where I come in to help find the lender with the right product. Feel free to give me a call to discuss the possibilities, I am not a tax accountant, lawyer nor investment advisor but I can help find the right mortgage to use that makes this process simple.