Hi folks,

One of the best tips I have ever received pertains to all that interest everyone has to pay on their mortgage.

You may already know that interest on loans which are used for investing is tax deductible.

Unfortunately the same is not true for mortgages. That interest (which is often HUGE) is not tax deductible.

Here's the interesting thought:
- accumulate investments over time

- when ever possible, redeem those investments and pay down the mortgage

- set up a secured line of credit against the equity you have just made available in the home (these l.o.c. are usually available at prime)
- borrow against that line of credit and invest that money

The net result is that you have converted your mortgage debt into secured debt which you are using to invest.

The interest you are paying on what is essentially your mortgage is now tax deductible.

Be careful, though. Revenue Canada may not accept this strategy if the investment you make is right back into the same stock/mutual fund/property/etc.

Consult a financial adviser to ensure the way you apply this strategy will be accepted by RC if they decide to review your file.

D.