We Help Clients Implement The Equity-To-Investment Tax Strategy, Commonly Referred To As The "Smith Maneuver"
The Smith-style maneuver is a long-standing Canadian financial strategy that allows homeowners to use re-advanceable mortgage equity to invest over time. When implemented correctly and matched to the right investor profile, it can improve long-term tax efficiency and net worth outcomes.
Like all leveraged investment strategies, results vary and depend on market conditions, interest rates, and individual circumstances.
An Investment Strategy Designed for Homeowners
The key to this "maneuver" is it uses your home's equity to invest and generate returns that are greater than the interest you pay on your mortgage. For example: your mortgage rate is 5% and your investment generates a 10% annual return. The difference is used to pay down your mortgage and to re-invest.
Potential Benefits of the Smith-style Maneuver
Outcomes depend on personal finances, market performance, and tax treatment.
Potentially accelerate mortgage repayment over time
Tax refunds and investment income may be applied toward your mortgage principal, potentially reducing your amortization period.
Build long-term investment exposure using home equity
Principal payments can be re-borrowed and invested, providing potential for net worth growth over time.
Improve tax efficiency through deductible interest (where applicable)
HELOC interest used for investment purposes may be tax deductible, subject to CRA rules and individual circumstances.
How It Works in Four Steps
1. Get a New, More Powerful Mortgage
We set up a re-advanceable mortgage + HELOC so every principal payment can be re-invested.
2. Invest Borrowed Funds into Selected Income-Producing Assets
Each month, re-advanced funds are invested into selected income-producing assets. Many clients choose the Blue Pearl MIC based on its historical performance.*
3. Deduct the HELOC Interest
Because those borrowed funds are used to earn income, the HELOC interest is generally tax-deductible. We keep the money trail clean so you can claim it at tax time and receive a refund.
4. Apply Refunds Toward Mortgage Reduction
Tax refunds, if available, may be applied toward mortgage reduction, along with any investment income received.
What is the Blue Pearl MIC?
Blue Pearl Mortgage Investment Corporation provides investors with exposure to Canadian residential and commercial mortgages, focusing on capital preservation and income generation.
Blue Pearl MIC has generated an average annual return of 10% from 2018–2025.*
*Historical returns are not indicative of future performance. Investments involve risk, including potential loss of capital.
Blue Pearl Makes it Easy
We coordinate the mortgage, lending, and investment components so the strategy can be implemented efficiently, in collaboration with your professional advisors.
We'll coordinate your new, advanced (re-advanceable) mortgage
We'll automate the monthly re-advance and investment
You'll get quarterly reports showing HELOC interest, tax deduction, and portfolio growth
You could start with as little as $25K of your home's equity
All without impacting your current monthly mortgage payment.
Book Your Free 30-Minute Smith Consultation
Pick a time now and speak to an expert to help answer your questions or get started.
We'll run your information through the "Smith Maneuver calculator" and show you exactly how it can help you grow your wealth. There is no obligation or cost.
The strategy commonly referred to as "the Smith Maneuver" in Canada is a leveraged investment strategy and is not suitable for all investors. Investments in mortgage investment corporations are illiquid and involve risk, including the potential loss of principal. Tax treatment depends on individual circumstances and current CRA rules. Past performance is not indicative of future results. Investors should review the Offering Memorandum and consult qualified tax and financial professionals.