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  • Mar 14th, 2018 4:19 pm
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Apr 23, 2009
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Doesn't OP already have a mortgage and pay mortgage interest?
ksgill wrote:
Mar 14th, 2018 12:58 pm
I could never understand the logic behind paying $11,858 in interest to get a $5597 back in taxes. This means that you end up paying ~$6261 per year more (vs not having mortgage interest - $11,858 minus $5597 tax deduction).

I have heard similar logic around keeping student loans around for a long period of time. The truth is that unless you are getting really good returns in this period, there is very little point to these shenanigans. Am I missing something? :confused:
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ruchir wrote:
Mar 14th, 2018 1:01 pm
Doesn't OP already have a mortgage and pay mortgage interest?
No mortgage if he pays cash for the house?

crysim wrote:
Mar 9th, 2018 2:34 pm

My wife (31) and I (33) are in Ontario and just bought a condo for $616K. No kids. We've paid the downpayment and have a $484K balance owing. We could take out a mortgage, but we could use a combination of non-registered, cash and TFSA to paid it off in full completely.
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ksgill wrote:
Mar 14th, 2018 1:01 pm
No mortgage if he pays cash for the house?
His cash is limited to $181,000 whereas his mortgage is $480,000. Since, OP has a margin account with approx $90K margin loan, I am assuming he is invested in equities. To pay-off $480K, he would have to sell this investment and forgo growth and dividend. OP didn't mention if his TFSA is GICs/ savings etc. If yes, than he would have to compare what he earned in TFSA vs mortgage interest.

It really depends what OP's priorities are. But OP may want to deploy cash to TFSA and remainder to RRSP if he has room.

OP did mention 'smith-maneuver' so I assumed he is open to borrowing to invest. If so, this is one option.
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Wife B? What about wife A?!
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crysim wrote:
Mar 14th, 2018 2:29 pm
Thanks, I like this idea. Great idea with the joint margin - we don't have one today.
A few follow up questions in bold above.



What are the legal/discharge fees for if no mortgage is taken in step 1?

To answer a few other questions:
non-Registered will be partly drained (at ACB near current market) to re-fund TFSA/RRSP and a portion to pay off mortgage.
RRSP/TFSA/non-reg all hold tax optimized balance of 30% bonds 70% equity combined.
Sorry OP - I assumed you already have a mortgage. So no discharge fee, no interest penalties or other costs. The only cost you will have is perhaps the legal fee and maybe an appraisal fee (usually lender will cover that).

Since you don't have a mortgage - the steps may be slightly different.

(1) Remaining $480K for condo to be paid from cash and by selling investments.
(2) Get refinancing with a mortgage on Condo for $480K and invest back into a joint margin with spouse (open a new account to keep it clean). HELOC will be expensive. It is much cheaper to get a 25 year mortgage (you can always pay it off early or at the end of 5 years).
(4) Make mortgage/refinancing payments from the dividend income

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