Does a mortgage checking account really work? Has anyone heard of Sydney Financial Group?

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A company called Sydney Financial Group has shown me that I can pay off my $ 110,000 mortgage in less than 6 years. They do this with a “Mortgage Checking Account” that is kind of like a home equity loan. This really sounds too good to be true. Any insight?

  1. Reply
    May 2, 2011 at 11:45 pm

    The concept is great if you are disciplined and don’t overspend and end up with a big HELOC balance. It does work though! I would really research the company first.

  2. Reply
    huskie h
    May 3, 2011 at 12:35 am

    With a normal mortgage, when you get paid, your paycheck goes into a checking/savings account and you pay your mortgage and other bills from these account. The mortgage is a fixed amount payment. If you want to pay off your home earlier, you can add more money to your monthly mortgage payment. The drawback of this is that if you need some extra money, it’s locked away in the home equity which you can’t get to

    A mortgage checking account is basically a home equity loan and the way the system works is that your paycheck is deposited into your mortgage and you spend normally using checks, ATM card, credit card etc. drawn on the mortgage account. This way, the average monthly balance of your mortgage is lower thus generating less interest charges. If you need extra money for a vacation it can. One of the benefits is that a separate savings account may only give you 1 or 2% interest (if you’re lucky). With a mortgage checking account, the effective interest rate of savings is the interest rate of your mortage.

    The system works well if you aren’t the type that lives paycheck to paycheck, spending everything you make. My understanding is that roughly 40% of the mortgages in Australia are of this type. Here in the U.S., the system is almost unknown.

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