Canadians are forever looking for ways to pay down their mortgage faster. That’s a big reason the Smith Manoeuvre has generated such interest. Yet when it comes to using tax deductions to reduce your amortization, there hasn’t been much competition to the Smith Manouevre.
That may be changing. DPR Financial, a wealth advisory firm based in Cambridge, Ontario, has reportedly been having success with a new product it calls the Millionaire Mortgage. The Millionaire Mortgage is designed to create a portfolio of investments and generate tax refunds that can be used to pay down a mortgage faster.
In a nutshell, it works by using your home equity to finance a large unsecured line of credit (ULOC) which is separate from your mortgage. The ULOC is then invested in a portfolio of actively managed “segregated funds” (an investment similar to a mutual fund but with an approximate 25% maximum downside). The interest paid to support the investment loans is tax deductible and generates an annual tax refund that is used to pay down the mortgage.
Like the Smith Manoeuvre, the idea is to build a large and growing portfolio of investments and accelerate the pay-down of your mortgage.
As with any investment, there are both potential rewards and risks. Because of the Millionaire Mortgage’s intricacy (and because we’re not financial advisors) any questions about the products inner workings should be posed to DPR Financial directly. Their contact information is available on their website.
Please note: This is an informational post only and not a recommendation of any kind. Please do your own research and consult independent tax and financial advisors before acting on any financial information you read online.
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