Tax Deductible Mortgage
Smith Manoeuvre Calculator
Does the Smith Maneuver Fit into your Financial Strategy? Find out with this quick and Simple Smith Maneuver Calculator!
Smith Maneuver calculator
Experiment with a simplified projection of how a readvanceable mortgage, HELOC, and reinvested tax refunds could affect your net worth over time. This is an educational tool only and not personalized advice.
Results
Enter your scenario above and run the simulation to see estimated tax refunds, net worth impact, and how much sooner your non-deductible mortgage could be paid off.
What is the Smith Maneuver? A Quick Introduction.
The Smith Manoeuvre is a tax and mortgage strategy that gradually converts your non‑deductible mortgage into a tax‑deductible investment loan. Using a readvanceable mortgage and HELOC, you pay down your mortgage, re‑borrow against the equity to invest, and use the investment income and tax refunds to accelerate your paydown.
Done well, it can help you build an investment portfolio faster, reduce your tax bill, and pay off your non‑deductible mortgage sooner. Done poorly, it can add risk and complexity you don't need—which is why advice and planning matter more than the buzzwords.
On this page, you can explore a simplified calculator version of the strategy and then talk through the assumptions, risks, and implementation details in your own situation.
How to fill out the Smith Maneuver Calculator
Mortgage Details Section
In this section, we assume that you’ve refinanced the mortgage into a Smith Maneuver eligible mortgage.
Enter in the details of the property as well as the mortgage and HELOC details.
Typically if you have a specific retirement plan, you can adjust the mortgage amortization to match the time frame you’d like to retire in.
Income and Taxes Section
This section helps calculate the marginal tax bracket you have. It is an estimate – keep in mind that I am not a certified accountant. These brackets are based on basic taxes and don’t include variations in taxes.
Currently I only have the calculator supported for Alberta and BC borrowers.
Savings and Investments Section
The savings and investment section determines how much assets are available to invest, and what investment rate you expect.
Liquid assets saved should be assets in Non-registered accounts.
Accelerators Section
The Smith Maneuver has different accelerates so I wanted to add them to this calculator.
Prime the Pump accelerator uses extra equity in your propery to maximize the initial leverage.
Debt Swap is an accelerator that replaces a portion of your non-deductible mortgage with liquid assets you currently have. You would pay the existing mortgage down, then reborrow the funds and re-invest them.
Tax refund pre payment is fairly straight forward. If you want to add your tax refund in to the strategy, it can help you pay your mortgage down faster.
Considering the Smith Manoeuvre?
Get clear on whether this strategy fits your risk tolerance and goals.
We’ll map out how a readvanceable mortgage, HELOC, and investment plan could work in your situation—and when it might not make sense.