There are several taxation and investment growth benefits to the Smith Maneouver.

What is the Smith Manoeuver? ™ 

• It is a legal tax strategy that effectively makes interest on a residential mortgage tax-deductible in Canada.
• The strategy has a remarkable snowball effect that generates large and growing annual tax returns, enables the homeowner to knock years off their life of a non-deductible mortgage, and builds an impressive financial portfolio at the same time. 
• The Smith Manoeuver is not an overly complicated financial strategy but there are a number of moving parts.  Educate yourself from the source – www.smithmanoeuver.com

The Basics

• By turning your mortgage into an ‘investment loan’ you can claim the interest that you pay on your mortgage.  This is done by first getting a readvanceable mortgage in Canada.
• Readvanceable mortgages combine a mortgage with a home equity line of credit.  As you pay off your mortgage the credit limit of your HELOC increases.
• You then borrow from your HELCO to invest.  Since your HELCO is now an investment loan, you can claim the interest that you pay as a deduction against your income.  You can then use the extra tax savings to pay your mortgage, which will allow you to borrow more money from the HELCO to invest.