The Smith Maneuver

There’s been a lot of buzz about the Smith Maneuver lately.  Is it a good mortgage strategy?  Or isn’t it?  Here are two recent opinions from the Toronto Star and Canadian Capitalist .

  1. Well then there would be nothing to “manoeuvre!” :)
    (i.e. no non-deductible debt to pay down)
    Of course, you could always invest your equity if the return was notably higher than your line of credit rate–to justify the risk.
    (Of course, we wouldn’t advise doing this without the endorsement of a licensed financial planner…and an iron clad investment strategy.)

  2. I’ve been doing the Smith Maneuver for about 10 years. I receive a monthly dividend (which seems to decrease each year) and use this to pay down my mortgage. I have a small interest payment on my equitity line of credit which I pay out of pocket. My problem is that my investments are worth a lot less money then what I paid for them. I paid $120, 000. and they are now worth $74,000. sooo, is this the best way to pay down our mortgage…I’m having doubts. I know the economy has been bad but if it doesn’t soon pick up I won’t have any investments worth anything.

  3. I’ve been doing the Smith Maneuver for about 10 years. I receive a monthly dividend (which seems to decrease each year) and use this to pay down my mortgage. I have a small interest payment on my equitity line of credit which I pay out of pocket. My problem is that my investments are worth a lot less money then what I paid for them. I paid $120, 000. and they are now worth $74,000. sooo, is this the best way to pay down our mortgage…I’m having doubts. I know the economy has been bad but if it doesn’t soon pick up I won’t have any investments worth anything.

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