Americans have been able to write the interest on their mortgage payments off for years, something most Canadians don’t realize they can do. Following Fraser Smith’s strategy allows you to slowly turn your bad mortgage debt into good mortgage debt. By properly restructuring one’s affairs, it’s possible to use certain types of flexible mortgages – the Matrix Mortgage from Firstline Mortgages in particular – that gradually convert non-deductible mortgage dent into deductible investment loans.
You start out with say a $200,000 mortgage that is not deductible, every single dollar that is pumped into paying down your principal is pumped back into a loan to buy investments, the interest on which is tax deductible. Gradually, the mortgage falls to zero and the investment portfolio soars to $500,000 – assuming a 10% return over 22 years (a net $300,000 if you subtract the debt which remains in place)