🇨🇦 TFSA Collateral Strategy

BORROW AGAINST
YOUR TFSA

// Fill in 3 simple steps — everything else is calculated for you

01
What do you earn?
Enter your take-home pay — we'll handle the weekly → monthly conversion
$
= $4,333 / month
$
Max you can borrow against it: $12,750
5
years
1 yr102030 yrs
// Where does your monthly income go?
TFSA
Left over
TFSA Contribution
—
Loan Interest
—
Bills (borrowed)
—
Leftover Cash
—
02
How much goes into your TFSA?
Slide to set the % of your monthly income you contribute — we'll show you the dollar amount
10%
= $433 / month
1%25%50%75%100%
6%
/ year
1%25%50%75%100%
Index ETF avg ~7–10% · GIC/HISA ~4–5% · Be conservative
✦ Your paycheque goes straight into your TFSA. It grows tax-free and acts as collateral for the loan. When the loan needs to be repaid, you withdraw from your TFSA to cover it — that withdrawal reduces your TFSA balance but restores your contribution room on January 1 of the following year.
03
Your Non-Registered Loan Account
Bills are borrowed here each month · secured by your TFSA · you withdraw from TFSA to repay
$
Rent, utilities, groceries, subscriptions, etc.
35%
of your monthly income goes to bills
5%
/ year
1%25%50%75%100%
Wealthsimple secured LOC rate — check your account for the exact rate
$
Dividends or interest earned in the non-reg account are applied directly to reduce your loan balance each month. Leave at $0 if none.
LOC: pay interest only each month. Principal rolls forward. Most common structure for TFSA-collateral borrowing.
You withdraw from your TFSA every month to cover the loan interest + any principal. Withdrawal reduces TFSA balance but restores your contribution room on January 1 of the following year.
// Your Results — Updated Live
—
—
—
TFSA After 5 Yrs
—
tax-free growth
Tax-Free Interest Earned
—
CRA cannot touch
Loan Interest Paid
—
cost of borrowing
Net Arbitrage Gain
—
TFSA interest − loan cost
Total Bills Covered
—
borrowed from non-reg
Paycheque → TFSA
—
total deposited
TFSA Withdrawn to Repay
—
loan repayments
Loan Balance Owing
—
at end of period
True Net Worth
—
TFSA minus loan balance
TFSA Value vs Loan Balance
— —
Monthly Cashflow Breakdown
Take-Home
—
Goes to TFSA (full paycheque)
—
Monthly TFSA Growth vs Loan Cost
—
Your full paycheque goes into your TFSA. Bills ($0/mo) are borrowed on the non-registered LOC. You withdraw from your TFSA periodically to repay the loan interest.
// Growth vs Debt Over Time (hover bars)
TFSA Interest TFSA Deposits Loan Balance
// Breakdown
Year TFSA Value TFSA Interest (Total) Interest / Month TFSA Withdrawn Bills Covered Loan Interest (Total) Loan Interest / Month Loan Balance Net Worth
// Key Things to Know 🇨🇦
✦Your TFSA is collateral only — it sits untouched, compounding tax-free. Wealthsimple extends the loan through your non-registered account, secured against the TFSA balance. Nothing leaves your TFSA unless you choose to withdraw to repay the loan.
✦Any dividends or interest earned in the non-registered account go directly toward reducing your loan balance — enter that monthly amount in Step 3 to see the impact on how fast your debt shrinks.
✦The strategy wins when your TFSA return > loan interest rate. Your TFSA keeps compounding fully — that's the core advantage over just withdrawing to pay bills.
✦TFSA withdrawals restore your contribution room on January 1 of the following year. If you ever repay the loan by withdrawing from your TFSA, you don't permanently lose that room.
✦Loan interest on the non-registered account is not tax-deductible for personal borrowing in Canada. That's fine — your TFSA growth is tax-free anyway, which is the real advantage here.
✦If your TFSA investments drop in value, Wealthsimple may ask you to top up the account or reduce the loan (collateral call). Keep a safety buffer — don't borrow 100% of your TFSA value.
✦Confirm your exact TFSA room at canada.ca → My CRA Account. Over-contributions are penalized 1%/month on the excess.