Rental Cash Damming Calculator
Models the cash-damming flow on your numbers: rental income charged to a HELOC, the same dollar amount applied to the personal mortgage, deductible interest claimed annually, refunds redirected first to the HELOC and then invested. Two headline numbers: Debt Conversion (the personal mortgage hits $0) and Mortgage Freedom (the HELOC does too).
Debt Conversion
8.2 yrs
Your personal mortgage balance reaches $0 — vs 25 yrs without the strategy. An intermediate milestone, not full debt freedom: the HELOC balance is not yet $0 at this point — see Mortgage Freedom.
Mortgage Freedom
19 yrs
Personal mortgage and HELOC both at $0 — every dollar of debt this strategy touched is gone. This is the number that actually matters; Debt Conversion is a step on the way there, not the destination.
Years shaved off your payoff timeline
Pre-tax income equivalent
$316,223
Those 6 years saved are $198,714 in mortgage payments you'll never have to make. At your marginal tax rate, that's the same as earning $316,223 pre-tax — what you'd need to make at your job, before tax, to net the same amount.
Net wealth improvement (the strategy's own effect)
$542,045
Over 30 years: the future value of the payment savings you invest, less any HELOC still outstanding. This is what cash damming itself creates — it deliberately excludes your rental's own appreciation, which you'd have with or without this strategy.
Total projected net worth (including the rental)
$1,813,222
Adds the rental's value at horizon — real, but ordinary property appreciation, not something the strategy causes. Assumes the appreciation, rent-growth, and investment-return rates below hold for the full period — not a guarantee.
Payoff timeline
At Debt Conversion, your mortgage doesn't disappear — it changes form into HELOC debt. That HELOC then has its own payoff period, a new amortization, exactly like the original mortgage had one. Mortgage Freedom is when that new amortization finishes.
The gap between the two strategy bars — 10.8 years — is the HELOC's new amortization: how long it takes to pay off the converted debt once it's the only debt left.
Debt Conversion (with strategy)
8.2 yrs
Personal mortgage at $0 — HELOC balance not yet $0
Mortgage Freedom (with strategy)
19 yrs
Personal mortgage AND HELOC both at $0
Total tax refunds
$82,449
Future payments saved
$198,714
At year 30 (wealth horizon)
This is what the two net-worth figures above are built from. Most of the total is typically “Future value of rental” — ordinary property appreciation you'd see with or without this strategy, not something the strategy itself creates.
| Future value of invested payment savings | $542,045 |
| Future value of rental | $1,271,178 |
| Rental mortgage remaining | ($0) |
| ILOC balance (deductible debt) | ($0) |
| Net wealth improvement (strategy only) | $542,045 |
| Total projected net worth (incl. rental) | $1,813,222 |
Personal mortgage paydown
Balance over time, with cash damming vs without. The HELOC line shows deductible debt growing in the background.
Net rental cash flow, 5-year bands
Average monthly net rental cash flow per band, with rent appreciation applied. Negative numbers are the dam volume.
| Window | Avg monthly net cash flow |
|---|---|
| Year 1 to 5 | +$52.21 |
| Year 6 to 10 | +$292.16 |
| Year 11 to 15 | +$557.08 |
| Year 16 to 20 | +$849.57 |
| Year 21 to 25 | +$1,172.51 |
| Year 26 to 30 | +$1,529.06 |
Personal monthly payment
$2,759.92
ILOC ceiling (today)
$205,000
Capacity grows as the personal mortgage shrinks.
Recommended clearing-account buffer
$728
~1.5 months of rental true cost.
What this is actually doing
Each month, your rental income is redirected: it prepays your personal mortgage as extra principal, and you draw that same dollar amount from a HELOC to cover the rental's own costs (its mortgage payment, property tax, insurance, and maintenance). Because those borrowed HELOC funds are traceably used for the rental's income-producing expenses, the HELOC interest is tax-deductible. The rental's own cash flow also factors in every month. If the property runs cash-flow positive, that surplus pays the HELOC down a bit faster. If it runs cash-flow negative, the HELOC covers the shortfall, capacity allowing. Once a year, the resulting tax refund is also applied to the personal mortgage. Net effect: a portion of your non-deductible personal-mortgage debt gradually converts to deductible HELOC debt, at the pace your rental income, cash flow, and HELOC capacity allow.
“Debt Conversion” above means your personal mortgage reaches $0 — it does not mean you're debt-free. From there, this projection assumes your freed mortgage payment (plus future tax refunds) is redirected to pay down the HELOC itself, the same way it was previously redirected to the mortgage. “Mortgage Freedom” is the point the HELOC also reaches $0 — true, full freedom from every dollar of debt this strategy touched. Whether to actually pay the HELOC down this way, versus keeping it outstanding as ongoing deductible leverage, is a real choice with real tradeoffs — this calculator shows one path, not a recommendation; a full analysis would walk through both.
This is an illustrative estimate, not a guarantee of any specific outcome. The Debt Conversion and Mortgage Freedom timelines and tax-refund figures depend on your HELOC/LOC capacity actually being sufficient for the full projection — see any capacity warning above. Mortgage Freedom additionally assumes you actually redirect the freed payment to the HELOC after Debt Conversion, rather than some other use. The net-wealth and future-value figures additionally assume the property appreciation, rent appreciation, and investment growth rates you entered hold constant for the entire horizon, which real markets don't guarantee. Real results also depend on discipline, lender cooperation, and CRA documentation. Implementation belongs with a qualified CPA who can review your T776 history and confirm the structure on your file.
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What this calculator misses
Cash damming lives or dies on tracing. The model assumes every HELOC dollar is used for the rental operating expense it's tagged for, every personal mortgage prepayment exactly matches that HELOC draw, and the accounts never co-mingle. In practice, even one personal expense run through the rental HELOC can contaminate the deduction. The calculator can't enforce discipline. The strategy call is where the implementation plan gets built.