Smith Manoeuvre

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The Smith Manoeuvre is a leveraged investing technique whereby you:

  1. Get a HELOC that’s linked to your mortgage (a.k.a.  A “readvanceable mortgage” where the available HELOC credit increases as you pay down your mortgage portion.)
  2. Use that freed-up HELOC room to reborrow the principal that you pay down on your mortgage
  3. Buy income-producing investments with that borrowed money
  4. Write off the borrowing costs
  5. Use the tax refund to pay down your mortgage quicker.

The Smith Manoeuvre was named after financial strategist and father of the tactic, Fraser Smith, in 2002.

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