The Smith Manoeuvre is an efficient strategy to use your home equity to invest for your future without using your cash flow, while converting your mortgage into a tax-deductible debt.
This method is known for its effectiveness in enhancing financial plans and can bridge the gap to achieving your retirement goals.
New OSFI Mortgage Rules
If you do the Smith Manoeuvre, understanding the new OSFI mortgage rules is crucial.
Recent changes to mortgage regulations by the Office of the Superintendent of Financial Institutions (OSFI) have introduced new constraints on readvanceable mortgages (CLPs). Here’s what you need to know:
As OSFI notes, while many borrowers will see no immediate effect, those with a loan-to-value (LTV) ratio exceeding 65% will experience a gradual shift where a portion of their mortgage principal payments will go toward reducing their overall mortgage balance until it falls below the 65% LTV threshold.
Impact on the Smith Manoeuvre
The new rules will have a moderate effect …