Help Your Clients Build Wealth by Restructuring Their Mortgage

For most Canadians, a mortgage is their most considerable monthly expense. But with a suitable structure, a mortgage can also become a powerful wealth-building tool. This is where financial advisors can add real value by showing clients how to transform what feels like “dead money” into an investment opportunity.

The principle is simple: when borrowed funds are used to generate income, whether through a rental property or a diversified investment portfolio, interest costs can work differently. Instead of just being an expense, they can support a long-term wealth strategy. Financial advisors don’t need to walk clients through the tax mechanics. The real opportunity is starting the conversation and connecting them with your trusted mortgage experts and tax specialists to help their clients execute this strategy.

One of the most practical ways is through a readvanceable mortgage. Each principal payment automatically frees up borrowing capacity in a line of credit, which can then be reinvested into income-producing assets. Over time, clients shift from paying down non-deductible mortgage debt to building an investment portfolio without taking on additional monthly cash flow strain.

For clients with significant equity or those refinancing, there’s also the option of repurposing part of their mortgage into an investment loan. This allows them to accelerate portfolio growth instead of waiting until their mortgage is fully paid. By reinvesting tax refunds or rental income back into the mortgage, the process can speed up even further.

One of the better-known approaches in Canada is the Smith Manoeuvre, which has been around for decades. The idea is straightforward: homeowners with a readvanceable mortgage can use each principal payment to free up an equivalent amount of credit, which can then be invested in income-producing assets. Over time, this gradually shifts debt from non-deductible mortgage borrowing to investment borrowing, while maintaining regular monthly payments at the same level.

The strategy highlights a broader point for advisors: mortgages don’t have to be treated as stand-alone debt. They can be integrated into a larger wealth plan, helping clients invest earlier, benefit from compounding, and potentially reduce the effective cost of borrowing. While it requires discipline and the right mortgage structure, the underlying principle is simple: use existing cash flow more efficiently to balance debt repayment with long-term wealth building.

Turning Knowledge into Client Value

Why does this matter for financial advisors? Because it reframes the mortgage as a tool, not just a liability. It opens doors to conversations about risk tolerance, investment diversification, and insurance coverage. It also positions you as the trusted professional who can bridge wealth planning with mortgage strategy, a combination that clients rarely expect but deeply value.

Want to help your clients turn their mortgage into a wealth-building tool? Partner with nesto mortgage experts to explore how these strategies can fit into your clients’ financial plans.

Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.