Cash damming is a Canadian strategy for turning a plain mortgage into tax-deductible debt: a client routes the business or rental income that already covers their deductible expenses through a readvanceable line of credit instead of a chequing account, then puts the cash it frees up against the mortgage. The Cash Damming calculator, in the Restructure group of Tools > Calculators, prices the cash flow side of that trade so you can show a client roughly what it is worth before the details go to their accountant.
Who Cash Damming Is For
This fits a client who already carries recurring deductible costs, rental expenses, self-employment overhead, business expenses, on top of a mortgage they cannot otherwise pay down faster. It has nothing to offer a client with no deductible expense stream: the strategy converts existing deductible spending into a debt swap, it does not manufacture a deduction that was not there before.
What to Enter
Attach a deal or enter the mortgage fields directly: Mortgage balance, Rate, and Amortization. Add the client's Annual deductible expenses, the HELOC rate, and their Marginal tax rate. The projection compounds the mortgage side the way Canadian closed fixed mortgages actually do, semi-annually, so the payoff dates line up with what a lender would quote.
Recycling Refunds Against Keeping Them
Toggle whether the tax refund the strategy produces each year gets recycled back onto the mortgage or kept by the client. Recycling accelerates the payoff further, since it stacks another payment on top of the redirected expense cash flow. Keeping the refund leaves the mortgage timeline to the deductible expenses alone, with the refund landing in the client's pocket instead.
Reading the Outcome
The headline numbers are Cumulative tax saved and the HELOC interest paid to capture those savings, the two figures a client needs weighed against each other. Below that, the calculator shows how much debt has moved onto the HELOC by payoff, the after-tax cost of carrying that HELOC balance, and the new payoff date beside the old one. Read the debt-moved figure together with the interest figure, not apart: paying off the mortgage sooner is only half the story, and the other half is what it cost in HELOC interest to get there.
Why This Is Not Tax Advice
The calculator models the mechanics of the strategy. It does not confirm whether this client's expenses actually qualify. Deductibility turns on Canada Revenue Agency tracing rules: the borrowed money has to pay expenses that genuinely earn income, and it has to move through a dedicated account with no commingling of personal and business funds. Cash damming also converts debt rather than erasing it, so total borrowing stays about the same and the HELOC rate can move independently of the mortgage rate. Confirm eligibility and tax treatment with the client's own accountant or financial advisor before anyone acts on this projection.
What to Do Next
Use Choose the Right Calculator to see how cash damming sits alongside the Pay down calculators for the same client.