Mortgage rates continue to be at record lows. RBC and TD are offering 2.89-3.01% on a five year fixed rate and BMO is offering 2.69% on a 4 yr. fixed. Unbelievable!!
If you have rental or investment properties that have gone up in value why not consider doing an equity take-out to refinance and payoff your primary residence. Most people under utilize their rental properties which are a great source of yearly tax write-offs. Your mortgage on a primary residence can never be used as a tool to lower your taxable income, so why not move your debt around? Restructuring debt is a common tactic that HNW clients use all the time. It is called “monetization of money” or in simpler terms, the “movement of money.” By moving your debt from your primary home to a taxed advantaged property, like a rental property, you not only lower your mortgage on your home, but now instantly begin to be able to write off the interest accrued on your debt. Overall, you still have the same debt load. The difference is that you have now increased the debt on the rental: the “good debt,” used to lower your marginal tax rate (MTR) and conversely lowered your “bad debt,” on your home, line of credit or car loans.
