It is getting more expensive to own a home but Jim and Linda were able to cut their mortgage cost by over $93,000
Interest rates are rising, costs are going up, and stress about money is at an all time high. A $500,000 mortgage at 5% interest costs $457,106.34 in interest over thirty years. That’s too much money!
A few years back John and Linda were looking at this exact scenario. Ill share with you how they discovered they could save over $130,000 in interest costs.

23% of your first payment goes to pay off the debt
Their first mortgage payment of $2672 paid off $600 of the mortgage and the rest ($2072) went to interest. That’s pretty crazy… at 5% rates over three quarters (77%) of the first payment goes towards interest.
Over the life of the mortgage they would pay $462,269 in interest. Pretty scary considering they only borrowed $500,000! Even worse they would need to earn $1,260,572 to pay off the mortgage and interest (they have to pay roughly 31% income tax before they can pay off their mortgage). No wonder it takes half a lifetime to pay off your mortgage!
Created in the 1980’s this strategy has saved Canadian’s millions
The strategy we helped John and Linda with is called the Smith Manoeuvre. It was created in the 1980’s by Fraser Smith and multiple best selling books have been written about it. If you would like a free copy of the book click here.
The focus of the strategy is to flow your mortgage payments as efficiently as possible to maximize retirement savings and tax deductibility.
What does that really mean?
It starts with a very specific mortgage product called a readvancable mortgage.
This type of mortgage product has a home equity line of credit that grows as mortgage debt is paid off.
Increase your retirement savings while saving thousand on your mortgage
Over the first year they put an extra $9,400 towards their retirement savings by ONLY paying their mortgage. Over the remainder of their mortgage this $9400 will grow to $87,582 if it is invested at an 8% annual return. For reference the US stock market (S&P 500) has averaged 10.5% since 1957.
In addition to growing their retirement savings they will also generate roughly $520 in tax deductions every year from the $9400 they reinvested.
They created $282,000 in tax deductions and added $1,280,000 to their retirement savings
Each year they reinvest all of the money that goes towards paying off their mortgage. This allows them to build a growing investment portfolio and to generate tax write offs.
Over their 30 year mortgage they will generate $282,000 in tax deductions and build an investment portfolio of over $1,280,000. The Smith Manoeuvre will potentially improve their net worth by almost $800,000.
What would saving over $100,000 and have an extra $800,000 for their retirement do for you?
When John and Linda receive their tax refund at the end of each year they use it as a prepayment against their mortgage and then reinvest the amount they paid down.
The goal is to pay down the non tax deductible debt (mortgage used to buy your residence) on your home as fast as possible. Every dollar you pay down is then reborrowed and invested long term for retirement. Any debt that is used to invest with the reasonable expectation of earning income is tax deductible. (We involved a chartered professional accountant and a financial adviser when planning the strategy)
Start making a change to have control of your finances
By creating six figure tax deductions and investing for retirement sooner you can drastically improve the quality of your retirement. For me personally I am implementing the Smith Manoeuvre so I can help my kids when they are adults. It seems to me that life is getting increasingly expensive and that I need to start taking action as early as possible to help my kids in the future.
It’s important to note that this is a powerful strategy to improve your net worth significantly but it does have risks that need to be professionally managed. Do not implement this on your own. I am a Smith Manoeuvre Certified Mortgage Broker and I work with accountants and financial advisers when helping clients determine if the strategy is a good fit. I am a fiduciary for my clients which means I must act in your best interests ahead of all others. Our goal is to work with you to determine the best long term options based on your goals and situation.
We will help you step by step
I believe in having a direct relationship with my clients and being available whenever you have questions. If you would like to connect for a call to ask questions here is a direct link to my calendar.
I am paid directly by lenders when I arrange a mortgage and will never bill you. My services as a professional are free to you.
One thing you may be wondering is who is this guy?
My name is Keaton and I am a licensed mortgage broker and owner of Kirkwood & Brennan Mortgage Group. My business partner Scott Brennan and I won Rookie of the Year across Canada for Dominion Lending Centers and hit the top 2% of all mortgage brokers in our second year. Before starting our own business helped run and manage one of the top 20 mortgage broker teams in Canada for almost five years.
One of the top brokers in Canada on your side!
For me trusts is critical and I want you to know why I am involved in the Smith Manoeuvre. I am the only one in my family who has graduated high school and at a relatively young age I realized that no one in my family was going to have any chance of retirement. In my 20’s I started to learn more about personal finance and to research real estate investing, tax strategies and different ways I could build a better retirement in order to be able to help my family as they grow older.
I have worked with thousands of clients and one thing I have learned during my time in the industry is that I am not alone in stressing about my kid’s future and my parents well being as they age. My goal is to help those around me get ahead financially so they can help their families.
We will help you save thousands on your mortgage
If you would like to connect for a call to ask questions or to discuss how you can save thousand on your mortgage click here.
Feel free to book a call and be skeptical! I have spoken on stage for dozens of investing groups and survived many public Q and A’s and expert panels. If there is anything I can do to help let me know and I will do my best to help you.
Get your savings estimate in minutes online
If you prefer to spend a couple minutes to get an estimate of your potential savings click here and answer a few questions. I will send you an estimate based on your situation, some podcasts on the strategy and a physical copy of Fraser Smith’s book on the strategy. Get your estimate here.