Load an example to explore scenarios:
IMPORTANT: Leverage Increases Risk
Key Risk: If your investment returns are LESS than the loan interest rate, you will LOSE money.
Example: If you borrow at 5.2% but investments only return 3%, the difference of 2.2% works against you.
Market Volatility: Investment values fluctuate. Leverage amplifies both gains AND losses.
Leveraged Loan Strategy
Loan Amount:
$0.00
Monthly Loan Interest Payment:
$0.00
Annual Loan Interest Cost:
$0.00
Potential Annual Tax Refund (Reinvested)🇨🇦 KEY CANADIAN BENEFIT: In Canada, interest paid on investment loans is tax-deductible! Each year, your tax refund = Annual Interest Cost × Your Tax Bracket. This refund is then reinvested, creating compounding returns. This is the primary advantage of leveraged investing.:
$0.00
Total Loan Principal InvestedThis is the total amount of your original loan plus the accumulated tax refunds you reinvested each year. This represents the total capital working for you.:
$0.00
Future Value of Loan InvestmentThis is how much your borrowed money would grow if invested at your specified return rate over the projection period. It does NOT account for taxes yet.:
$0.00
Future Value of Tax Refunds:
$0.00
Total Future Value:
$0.00
Less Loan Amount:
$0.00
Net Value After Paying Loan:
$0.00
Capital Gain:
$0.00
Tax Liability on Capital Gain:
$0.00
Net After-Tax ValueThis is your final result after: (1) Growing your investment, (2) Paying off the loan, and (3) Paying any taxes on capital gains. This is the most important number to compare between strategies.:
$0.00
TFSA Strategy
Monthly Contribution:
$0.00
Annual Contribution:
$0.00
Future Value of TFSA:
$0.00
Tax Liability:
$0.00
Net After-Tax Value:
$0.00
Visual Comparison
Final Net After-Tax Value Comparison
Height represents relative value. The higher bar shows which strategy yields more.
Growth Over Time (Projection Period)
This shows how both strategies grow over your investment timeline.
Tax Scenario Summary at End of Projection Period
Your Tax Position
Marginal Tax Rate (Regular Income):
30%
Tax Rate on Capital Gains:
15%
These are your tax rates used in the calculation above.
Impact on Leverage Strategy
Total Tax Refunds Received:
$1,200
Total Capital Gains Tax Owed:
-$26,231
What If Your Tax Rate Changes?
At retirement, your tax rate might change. Here's the impact:
If Marginal Tax Rate drops to 20%:
Leverage value: $260,000
If Marginal Tax Rate rises to 40%:
Leverage value: $230,000
Investment Comparison Summary
Leverage Strategy Net Gain Calculation
Total Interest Paid Over 0 Years:
-$0.00
Formula: Monthly Payment × 12 × Years
Total Tax Refunds Received:
+$0.00
This is the benefit of tax-deductible interest
Net Interest Cost (After Tax Benefit):
-$0.00
Interest Paid - Tax Refunds = Actual Cost
Net After-Tax Value:
$0.00
Net Gain (After-Tax Value - Interest Paid):
$0.00
TFSA Strategy Net Gain Calculation
Total Contributions Over 0 Years:
$0.00
Formula: Monthly Contribution × 12 × Years
Future Value:
$0.00
Net Gain (Future Value - Contributions):
$0.00
Leverage Strategy Net Gain:
$0.00
TFSA Strategy Net Gain:
$0.00