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Greater Toronto Area , ON , L6T 4L9 Canada

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How to make your mortgage interest tax deductible

Let us try to save some money on our mortgage

In Canada the interest paid to service your primary residential mortgage is not tax deductible. In United States it is. There is a delicate process to achieve that in Canada. Please remember that it is a complicated process and always consult the right professionals who can help you to do that. Tax deductible mortgage plan, a.k.a. Smith Manoeuvre after Fraser Smith.

Tax deductible mortgage planThe steps are as follows:

  1. Use all you non registered investment towards down payment. It is important.
  2. You have to make sure that you have paid enough principle in your house so you can get some money out. You have to get some special types of mortgage which allows you to withdraw the principle up to a certain limit.
  3. Borrow that paid-off principle back.
  4. Invest that money somewhere which will pay you more than the interest rate. Importantly – keep it invested.
  5. Get a tax refund on the interest paid for the borrowed amount and put that into your mortgage principle.
  6. Keep repeating steps 3-4 till you pay-off all your mortgage principle.
The figures explains the technique better.

Finally you start to see the resultsIt is important to note that there are a lot of financial analysts who are not very comfortable about this whole idea. So, before taking any steps please make sure that you are well aware about the process and the pro’s and con’s of it.

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About Us

Sudip Adhikari.
Agent License #M10001082
Broker Mortgage Diligent -
Head Office -1305 Matheson Blvd East, Mississauga, ON L4W 1R1
FSCO #10252 O.A.C , E&OE

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