Cash Damming Calculator
See how much you can save by converting your non-deductible mortgage interest into tax-deductible business expenses using a readvanceable mortgage.
New to this strategy? Read the guide:
What Is Cash Damming? A Canadian Tax Strategy for Business OwnersExpenses you can redirect through your HELOC (supplies, subcontractors, etc.)
Every $1 of deductible interest saves you 0¢ in tax.
$0
Over 25 years
$0
After tax deductions
$0
$0 / month
Pay Business Expenses from HELOC
Instead of your chequing account, use your HELOC to pay business expenses.
Use Freed Cash for Mortgage
The cash you saved goes toward extra mortgage payments, paying it down faster.
Deduct HELOC Interest
Since the HELOC was used for business, its interest becomes tax-deductible.
| Year | Standard | Cash Damming | ||||
|---|---|---|---|---|---|---|
| Mortgage Bal. | Interest | Mortgage Bal. | HELOC Bal. | Tax Savings | Net Interest | |
| Total | $0 | +$0 | $0 | |||
Readvanceable Mortgage Required
You need a readvanceable mortgage (e.g., Manulife One, Scotia STEP) that lets you re-borrow principal as you pay it down.
Business Income Required
Cash damming works for self-employed individuals or incorporated business owners with regular business expenses.
CRA Compliance
Keep meticulous records. The HELOC must be used exclusively for business purposes to maintain deductibility.
Consult a Professional
Always consult with a tax accountant and mortgage broker before implementing a cash damming strategy.
Not Financial Advice. This calculator is provided for educational and illustrative purposes only. It does not constitute financial, investment, tax, or legal advice. Results are based on simplified models and assumptions that may not reflect your actual financial situation.
No Liability. The creators and operators of this tool accept no responsibility or liability for any loss, damage, or financial consequence arising from the use of or reliance on the information or calculations provided.
Accuracy Not Guaranteed. Tax brackets, benefit thresholds, and other constants are estimates based on publicly available data and may not reflect the most current values. Calculations involve simplifications and may differ from actual CRA assessments.
Canadian Jurisdiction. All tax rules, benefit programs, and financial regulations referenced are specific to Canada. This tool is not applicable to other jurisdictions.
Always consult a qualified financial advisor, tax professional, or legal counsel before making any financial decisions based on these calculations.
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