Can you beat the bank?

Blog post Did you know that if you have a $1 million mortgage at 6.2% (which is most homeowners current variable rate) you are paying more than $4,700 in interest on a $6,073.78 monthly mortgage payment?

2/27/20242 min read

The most effective strategy for reducing this burden is to accelerate mortgage payments. However, with cash flow already tight, how do we tackle this? I am not talking about changing your payment from monthly to bi-weekly. There is something more effective.

The Smith Manoeuvre, a financial strategy that can potentially help you do just that. In this quick guide, we'll break down the basics of the Smith Manoeuvre in a way that's easy to understand.

What is the Smith Manoeuvre?

The Smith Manoeuvre is a financial strategy named after Fraser Smith, a financial planner who popularized the method. At its core, the Smith Manoeuvre involves borrowing against the equity in your home to invest in income-producing assets.

  1. Embarking on the Smith Manoeuvre requires careful planning and expertise. With the support of a certified team including mortgage brokers, accountants, and financial advisors, the process becomes streamlined and efficient.

    1. Strategic Mortgage Setup: Your certified mortgage broker will assist in setting up a specialized mortgage product tailored to your financial goals. This mortgage structure allows for flexibility in borrowing against the equity in your home.

    2. Expert Financial Guidance: Working closely with your financial advisor, you'll develop a personalized investment strategy aligned with your risk tolerance and long-term objectives.

    3. Tax Optimization: Your accountant will play a crucial role in optimizing the tax benefits associated with the Smith Manoeuvre. They will ensure that the interest paid on the borrowed funds used for investment purposes is appropriately deducted, maximizing your tax efficiency.

    4. Continuous Monitoring and Adjustment: Throughout the implementation of the Smith Manoeuvre, your certified team will provide ongoing support, monitoring the performance of your investments and making adjustments as needed to optimize results.

Is the Smith Manoeuvre Right for You?

While the Smith Manoeuvre can be a powerful wealth-building tool, it's not without risks. Before implementing this strategy, it's essential to consider factors such as your risk tolerance, investment knowledge, and financial goals. Additionally, working with a qualified financial advisor or mortgage specialist can help ensure that the Smith Manoeuvre is suitable for your unique financial situation.


The Smith Manoeuvre offers a strategic approach to simultaneously pay down your mortgage while building wealth through investments. By leveraging the equity in your home and investing in income-producing assets, you have the potential to accelerate your path to financial freedom. However, like any financial strategy, it's crucial to fully understand the risks and consult with professionals before proceeding.