The Cash Flow Booster is a strategy where you set up an advancable secured line of credit on your property and use it to make your mortgage payments. This replaces a large principal-and-interest payment with a smaller interest-only payment, turning negative cash flow positive while you ride out the rate cycle.
An advancable line of credit is required because as you make mortgage payments, the principal portion paid down increases your available credit limit by the same amount. Additionally, an advancable line gives you the option to roll it back into a mortgage later without pre-qualification or penalties.
Yes, after roughly 18 months you will have an outstanding LOC balance — in the example given, about $50,000. However, you will have accumulated approximately $44,000 in positive cash flow reserves, and the annual interest cost on the LOC is only about $250. You can then use the cash to clear the line or convert the LOC back into a mortgage.
Yes. The strategy does not need to be used only on rental properties; it can also be deployed on a primary residence to reduce monthly budget pressure caused by rising mortgage payments.
The video suggests using it for roughly 18 months, based on the historical pattern that once the Bank of Canada achieves its goals of controlling inflation and stabilizing the economy, rates tend to improve and you can exit the strategy.
