Wealth Comes Faster with an
Investment Loan

How it works
Benefits
Interest rates
Services & Calculators
Additional information

What is an investment loan?

An ideal option to boost the create wealth faster than a traditional investment strategy.

An investment loan is an ideal option to boost the potential growth of your investments. By leveraging borrowed money, you can significantly increase your investment capacity, thereby maximizing your potential returns while maintaining liquidity for other projects. This type of loan can be part of a tax-advantaged financial strategy since the loan interest is often tax-deductible.

Video Source: B2B Bank – Understanding Investment Loans

How do investment loans work?

Leveraged investing via investment loans is quite a simple concept:

  • You borrow money
  • You invest the money
  • You only pay interest on the loan
  • When you sell the investment, you repay the loan and keep any investment growth

An investment loan has the potential to generate greater returns for you than a traditional investment strategy. Here’s why:

  • Accelerates savings through a larger initial upfront investment and compound returns.
  • Compound returns on an investment means that returns are calculated not only on the initial investment, but also on the accumulated growth from year-to-year.
  • Investment loan interest has the potential to be tax-deductible, but not in all circumstances; when it is deductible, it can effectively reduce the overall cost of an investment lending strategy.

Benefits of an investment loan

Investment loans are particularly suitable for investors who prefer not to use their own money and may lack substantial liquid funds for investment, provided they have some level of risk tolerance.

  • Interest-Only Payments: Pay only interest, keeping cash flow flexible.
  • Maximize Investment Potential: Grow your investments while keeping liquidity.
  • Immediate Compounding: Lump sum investments start compounding right away.
  • Tax Deductions: Potential to reduce overall costs through tax benefits.
  • Segregated Fund Access: Benefit from principal protection and growth opportunities.

It’s especially beneficial for long-term investors (minimum 10 years) with non-registered assets, offering the advantage of reducing taxable income through tax-deductible loan interest.

Here’s how you can fast forward your savings

With a traditional savings plan, only the investment you make in the first year will have the full 20 years to grow. Each subsequent year, the amount you contribute will have less time to grow. This means that the amount you contribute in year 2 will only grow for 19 years, in year 3 for 18 years, and so forth, resulting in a lost opportunity for compound returns compared to a larger lump sum investment.

Let’s say you have $5,700 to invest each year for 20 years. With a traditional savings plan at a 15.6% rate of return, it would take 8 years to grow your savings to $100,000. After 20 years, your investment would be worth $724,773.82.

investment loan vs saving

Investing with Own Money vs. Investment Loan

However, if you made an interest-only annual payment of $5,700 toward a $100,000 investment loan at a 5.7% interest rate, the entire loan amount could benefit from the full 20 years of compounding at a 15.6% rate of return. After 20 years, your investment would grow to $1,816,170.77.
After repaying the $100,000 principal and $114,000 in total interest, you would still have $1,602,170.77 left — which is $877,396.95 more than the traditional savings plan.
This is how an investment loan could significantly accelerate your wealth accumulation.

*For illustrative purposes only. Actual rates and amounts may differ. The illustration is a hypothetical example and is not intended to project or predict actual results.

Investment loan interest rates

The rates shown are determined based on the Royal Bank of Canada’s prime rate (PR).

The interest rate is: PR+0.75%

*5.7% as of April 28 , 2025 

Interest rates are provided for information purposes only and are subject to change at any time without notice.

Ai Financial services on investment loan

If you lack sufficient funds, we can help you secure investment loans.

While people often think of debt as something to be avoided, an investment loan is a strategic form of debt designed to improve your financial position, providing money when you need it, for as long as you need it.

  • We Provide Loans from Canadian Tier 1 or Tier 2 banks or Credit Unions (e.g., B2B Bank, Manulife Bank, iA Trust, National Bank, DUCA).
  • Loans must be invested in Segregated Funds with Canadian Insurance Companies (e.g., Manulife, Canada Life, iA, Sun Life, Equitable Life).
  • Investment loans have a 20-year term but can be canceled anytime.

  • Only pay Interest-only payments at Prime rate + 0.75% (e.g., $475/month for $100K).

  • Client may qualified to withdraw 10% of Total Market Value to cover the interest.

  • With an Average Annual Return of 21.6% with AI Financial, borrowing to invest can be highly profitable.

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