My CC TFSA paid $20,000 off my mortgage this year
Covered call ETFs don't just pay distributions. Mine paid off $20,000 of my mortgage this year.
1 year ago when I came across passive income CC ETFs and started studying them, I started my passive income journey in July of 2025 with one of the specific goals in mind : can I use covered call ETF distributions to pay down my mortgage AND grow my TFSA at the same time ?
Year 1 : here's the proof of what I achieved in 1 year with quite a conservative approach :
💰 Household portfolio: $1.38M
📊 Combined TFSA: $312,806 : ~95% covered call ETFs
📅 CC ETF income generated: $60,462/year ($5,038/month) completely tax-free inside TFSA
Here's what that covered call income did:
→ $20,000 paid directly to our mortgage principal ($10K from each TFSA, as being first year we're being conservative, probably will increase this next year)
→ Both TFSAs kept compounding on the remaining CC ETF distributions
→ Zero units sold. Zero positions liquidated. Just distributions redirected.
And here's the trick you can use: By withdrawing $10K in distributions from each TFSA, not selling anything, we created $10K of new contribution room per account. Come January 1, that's $10K restored + $7K annual limit = $17K of fresh TFSA room per person.
That $17K goes straight back in. More CC ETFs. More tax-free income. Bigger distributions next year.
Pay the mortgage. Grow the TFSA. Increase the room. Repeat every year.
This was the goal from day one. Not accidental. Planned, executed, and now repeating.
Are you using your CC ETF distributions to create TFSA room strategically, or just letting them sit and reinvest?
