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The WealthFlow Mortgage Plan is a debt swap. Non-registered investments you already own are used to pay down part of your mortgage, and the same amount is borrowed back through a readvanceable mortgage and invested again. Like the Smith Manoeuvre, it converts non-deductible mortgage debt into deductible investment debt by borrowing to invest — it starts with money you already have rather than waiting for it to be freed up.
Stephen Green, Mortgage BrokerWaterloo Region · serving all of Ontario
Nearly 30 years in Canadian financial services
General information about the WealthFlow Mortgage Plan in Ontario. Everything is subject to full qualification, lender approval and final terms.
The same investments, the same total debt on day one, and a different purpose for part of that debt. It is a debt swap, done once, with money you already have.
Non-registered investments — held outside an RRSP or TFSA. The plan starts from money that already exists, not from money that has to be freed up over time.
Selling is a disposition, and it may trigger a capital gain or loss. That is a real cost with its own timing, and it belongs in front of your accountant before anything is sold.
The money is applied to the mortgage principal, which reduces the part of your borrowing that was used to buy your home.
On a readvanceable mortgage, paying principal down opens the same amount of room on the attached credit line. Not every lender offers one, and not on every existing mortgage.
The room is drawn and invested — by you, with your own advisor. The investment decision is never mine to make.
Because that portion is now used to earn income, its interest may be deductible. Whether it is depends on CRA rules and on how the funds are actually used, and keeping the borrowing traceable to the investment is what that depends on.
They share a mechanism and a set of risks. What differs is where the money comes from and when the change happens.
| WealthFlow Mortgage Plan | The Smith Manoeuvre | |
|---|---|---|
| Where the money comes from | Non-registered investments you already hold. | The principal portion of each regular mortgage payment. |
| When the debt changes character | Largely at the start, in one step. | Gradually, payment by payment, over decades. |
| A cost at the start | Possibly. Selling may trigger a capital gain. | Not from selling, because nothing is sold. |
| What it needs | A readvanceable mortgage, and non-registered investments to start with. | A readvanceable mortgage, and equity that grows as you pay it down. |
Most people who ask about this should not be doing it. The conditions below are what rule them out, not a sales filter.
Money already invested outside an RRSP or TFSA. Registered accounts work differently, and taking money out of them is its own decision with its own consequences.
A readvanceable mortgage, with the credit line behaving the way the plan needs. Most mortgages are not this, and changing to one has its own cost.
If the investments have grown, selling them may create a tax bill this year. That arithmetic comes first, and it is your accountant’s, not mine.
Income stable enough to carry the mortgage and the investment borrowing together, including in a year when markets fall.
The borrowing is secured against your home. You have to be able to sit through a bad year without being forced to sell.
Not optional, and not me. The investing and the tax treatment belong to people licensed for them.
This section is not a disclaimer at the bottom of the page. It is the part most worth reading, because it is the part that decides whether the rest applies to you at all.
Borrowing to invest amplifies the result in both directions. A fall is a fall on borrowed money, and the borrowing does not shrink because the investment did.
This is not an arm’s-length investment loan. The security is the roof over your head.
It depends on how the borrowed funds are used, and it can be lost by doing the wrong thing with them. It is not a feature of the mortgage.
What you pay to carry the investment portion is not fixed for the life of the strategy, and the strategy is long.
Not by me, not by the structure, not by anyone. Nothing on this page is a projection and there is deliberately no calculator on it.
Tracking, record-keeping and a more complicated return, permanently. Some people decide that alone is reason enough not to.
I am a mortgage broker. I can arrange and structure the mortgage the strategy runs on, and I hold the Smith Manoeuvre certification, which means I was taught the mechanics properly rather than picking them up from a forum.
I do not give investment advice and I do not give tax advice. Those are separate licences held by separate professionals, and anyone offering you all three at once is worth a second look. If you do not already have an advisor and an accountant, that is something I can help with — The Collective exists for exactly this.
All three run on a readvanceable mortgage, so they get confused. WealthFlow and the Smith Manoeuvre both borrow to invest. RateShield Advance restructures the mortgage debt itself and involves no investing at all.
If you do not hold investments and want to build toward this gradually, the Smith Manoeuvre is the version to read about. If investing is not the point at all, read about RateShield Advance instead.
It suits someone who already holds non-registered investments and carries a mortgage on their home at the same time — and it nearly always begins at a renewal, a refinance or a move, when the mortgage is being rewritten anyway. The Financial Collective sets up the mortgage this plan depends on, for clients across Waterloo Region, London and the rest of Ontario.
The mortgage is being rewritten anyway. Moving to a readvanceable structure at the same time avoids breaking anything or paying a penalty.
How renewals work →The structure is already open. Whether the investment borrowing is deductible depends on how it is set up, and it has to be set up at the beginning.
How refinancing works →If there is nothing to swap, the Smith Manoeuvre builds toward the same result gradually, from the principal in each payment.
The Smith Manoeuvre →Both convert non-deductible mortgage debt into deductible investment debt by borrowing to invest, on a readvanceable mortgage. The Smith Manoeuvre does it gradually from the principal in each regular payment. WealthFlow does it in one step at the start, using non-registered investments you already hold. The two can be run together.
The plan is built around non-registered investments. Registered accounts are treated differently, and taking money out of an RRSP is a taxable event in its own right. Which of your accounts could be involved, if any, is a question for your accountant before anything is sold.
There can be. Selling non-registered investments is a disposition, and if they have grown in value it may trigger a capital gain in that tax year. The size and timing of that cost is worked out with your accountant first, because it can change whether the plan is worth doing at all.
Your total borrowing is the same on the day of the swap, but how it is split and carried changes, and the cost of the investment borrowing can move over time. How the payments are arranged is worked out for your own file, not assumed.
That is the claim you will see elsewhere and it is not one I will make. What the structure does is change the character of the debt. What that is worth to you depends on investment returns nobody can promise and on tax treatment that is not a mortgage broker’s to rule on.
Often not. It needs a readvanceable mortgage that behaves a specific way, and most mortgages are not that. Finding out is a short conversation, not an application, and there is no credit check to have it.
If a colleague, an advisor or an article put this in front of you, ask whether it applies to you. You will get a straight answer, including — often — that it does not.