The two highest expenses that Canadians often have is the income tax and the interest that they pay.
This strategy helps Canadians reduce these two expenses by converting their mortgage interest into a tax deductible expense. This in turn provides additional tax refunds simply by making their regular mortgage payments. Also, by directing these tax refunds as prepayments towards their mortgage, our clients are essentially using their income tax dollars to become mortgage free much faster!
No, you are not required to wait until your renewal date. However, it is important to consider the total cost of terminating your existing mortgage and the setting up the new mortgage into your decision. We assist our clients in these calculations so that we can clearly determine what the best timing is to enter this strategy.
Because your mortgage is becoming more and more tax deductible over time, there is a natural hedge should interest rates being to rise. The higher rates increase the more tax deductions you will receive within this strategy. This is very different in comparison to a traditional mortgage where the borrower is exposed to 100% of the risk of rising interest rates. However, we always ensure that our strategies are locked in at rates that are the most advantageous possible. For example, if we can lock in the investment lending portion into a 5 year term, this will help stabalize the strategy for a defined period of time.
This is what we call "mortgage converstion date."
It is the moment that your entire mortgage has become tax deductible. You are not done at this point, as we need to now reach your "mortgage freedom date."
This is the date that the total level of investment assets matches the total level of debt within the strategy. The journey to mortgage freedom involves the repositioning of the mortgage into an efficient standard mortgage. Only difference is now, at this point going forward, you will receive tax deductions from simply making your mortgage payments.
This will vary depending upon a number of factors. The minimum cost is usually 3 months interest, which is always favourable to pay in order to enter into this strategy more quickly. However, should interest rates be more favourable currently, there may be an interest rate differential calculation take affect.
Our team will assist in the calculation of these exact costs so that you are 100% certain that is the most suitable time to consider entering into the strategy.
Precedence Private Wealth does not manage any investments for their clients. Investment management is provided by Precedence Capital and Harbourfront Wealth Management inc.
Visit the investment section of this site to learn more. Most specifically the Risk Parity Investment Strategy page to learn more about how they invest for our clients.
Yes, this will somewhat complicate your accounting and tax filing going forward. But that is why we have set up our accounting and tax advisory division at Precedence Private Wealth. Together we accurately prepare and file your taxes on your behalf.
There is also zero additional costs should CRA question, review, or audit your strategy at any point in the future.
However, this is standard for everyone of our tax planning clients!!!
The initial set up fee is $2950 +GST.
This includes full consultation for the set up of the appropriate mortgage structure and the activation of the monthly cash flows within the Tax Deductible Mortgage Strategy.
The investments are managed by Precedence Capital and Harbourfront Wealth Management Inc. and have their own applicable management fees associated with that service. Visit the Our Fees section to learn more.
No. However, we always assist our clients in determining if their current mortgages are the most efficient possible.
We strongly suggest that you engage our team for your accounting and tax filing when entering into this strategy.
Our clients enjoy a zero cost service for both managing and responding to any future CRA inquries for this strategy or any other matter should you decide to engage in using our accounting and tax division for filing your taxes.
We have had dozens of successful CRA reviews / inquiries in the past. Because we are fully aware of what may be requested for review, our team always plans ahead. Every year we gather all the documents required to support your tax deductions and store them in an organized manner in preparation for a possible review. This practice alone saves our clients hours of unnecessary work and quite possibly thousands of dollars in additional costs.
It is staggering how many Canadians are unaware of what is actually possible with respect to building and protecting wealth. We know it all starts with knowledge. Because, you simply cannot change what you do not see.
It is staggering how many Canadians are unaware of what is actually possible with respect to building and protecting wealth. We know it all starts with knowledge. Because, you simply cannot change what you do not see.
Our unwavering commitment and obsession is to educate and inspire Canadians to MAXIMIZE their wealth.
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