What about when mortgage is paid off? Put mortgage payment into the investment portfolio? I’ve read lots and watched lots of videos but this is never mentioned.
One can start all over again! You can re-borrow part of the outstanding HELOC as a mortgage amount again, and at a lower interest rate than the LOC. If you invest this money properly, this lower interest rate mortgage can also be kept tax- deductible. But as Ed says in this video, you will have to pay back some of the mortgage principal with each interest payment on the mortgage portion of the line of credit - which can then be borrowed back again as more HELOC debt, and invested again.
Steve, that is what the firs half of the video is about. You have 3 options. You get the most comfortable retirement if you keep your tax-deductible credit line or mortgage as long as you own your home. Don is referring to the "interest-only mortgage" strategy, which is at 13:08.
@@stevet7642 The same 3 options apply, as does the "interest-only mortgage" strategy. In my view, a paid-off rental property is like a GIC with modest, fully-taxed income. A highly-leveraged rental property can be a good investment. Each property is different, but if you have a growth mindset, you should either sell it to invest in equities or refinance it to restart the Smith Manoeuvre.
Very informative video, Ed. The self-made dividend approach is very wise to take advantage of tax rules. Thanks 🙂
What about when mortgage is paid off? Put mortgage payment into the investment portfolio? I’ve read lots and watched lots of videos but this is never mentioned.
One can start all over again!
You can re-borrow part of the outstanding HELOC as a mortgage amount again, and at a lower interest rate than the LOC. If you invest this money properly, this lower interest rate mortgage can also be kept tax- deductible. But as Ed says in this video, you will have to pay back some of the mortgage principal with each interest payment on the mortgage portion of the line of credit - which can then be borrowed back again as more HELOC debt, and invested again.
Steve, that is what the firs half of the video is about. You have 3 options. You get the most comfortable retirement if you keep your tax-deductible credit line or mortgage as long as you own your home. Don is referring to the "interest-only mortgage" strategy, which is at 13:08.
@@EdRempel I’m not talking about retirement but when the mortgage is paid off. With a rental my mortgage could be gone in 3-4 years and I’m 43.
@@stevet7642 The same 3 options apply, as does the "interest-only mortgage" strategy. In my view, a paid-off rental property is like a GIC with modest, fully-taxed income. A highly-leveraged rental property can be a good investment. Each property is different, but if you have a growth mindset, you should either sell it to invest in equities or refinance it to restart the Smith Manoeuvre.