There are not many people who would not want to:

-Pay off their mortgage more quickly
-Save money on taxes
-Save additional funds for retirement

Through the use of a specialized mortgage strategy called the Smith Maneuver, you can have all of these goals. And you can do them all together!

This strategy is named for Fraser Smith, a financial planner from British Colombia who developed this strategy a few years ago (see the press review). I encountered Fraser in Toronto at a mortgage strategy seminar (there were three mortgage consultants from Quebec).

The strategy uses a mortgage product conceived for this type of strategy that permits one, over time, to make investments or pay business expenses and in this manner lower the interest paid for thus on your taxes. There are many ways to limit risks and to improve the efficiency of this strategy.

This strategy has many components and it is better to discuss it by phone to find the best way to use it in your case. We also use the services of financial planners who specialize in this type of strategy to put together the various components of the strategy. (taux hypothécaire)

Advantages

• Allows you to pay off your home loan sooner
• Allows you to save on taxes
• Permits you to set up a savings plan for your retirement
• Works best for those in high income brackets
• Works best for the self employed, but works for salaried people as well
• The strategy has been tested by financial planners, accountants and tax lawyers
• It is possible to put the necessary home loan for this strategy in place but do not start it too late
• The strategy can be completely automated
• There are no additional charges to put a Smith Maneuver strategy in place

Disadvantages

• It is best for those with a mortgage that is 75% of the home’s value
• The home owner should be in a position to be able to increase his payments by 2% per year
• If you are a salaried employee, it is mandatory to use the investment component, so there will be an investment risk
• The strategy should be used over the longest period, (ten to fifteen years, if possible) so that the investment risk is reduced as much as possible
• The mortgagee should have a good understanding of investments, or he should consult with a professional financial planner

When to use this strategy for the long term

This strategy is usable in many situations, for all types of properties, and for every status of employment. The higher your taxes, the better this strategy works. This strategy can be used with other strategies according to individual requirements.

What does all of this mean to us?

Thanks to Fraser Smith, we are able to answer three critical questions important to our financial lives:

Is there a quicker way to pay off my mortgage?

Is there a way I can reduce my taxes?

Can I put more money aside to save funds for retirement?

This is a wonderful idea, but there are many was the Smith Maneuver can be used, differing from case to case. You should contact us and findthe way that would work best for you.