[Hendog]

Our Mortgage is due for renewal this month. I’m looking at ways to pay it down faster of course. There’s the usual mortgage with accelerated payments and that speeds things up. But I’ve come to know of a different mortgage strategy, at least here in Canada, known as the Australian Mortgage Concept. It boils down to being a big personal line of credit which you use as your all purpose bank account. The idea is that your paycheque gets deposited into the account which reduces your debt by that amount. Then you spend as you normally would between paycheques. The advantage is your entire paycheque reduces your exposure rather than a set portion of it. Rather than keeping another account in positive territory, which really doesn’t bring you any return, you put it all against your debt (mortgage). If you spend less that month then you’re ahead in mortgage reduction. The KEY, as I see it, you have to be disciplined in your monthly expenditures to make this work. My wife and I are doing well on that front. We spend less than we make, all our cars are paid for, the only exposure we have is our mortgage and some recent upgrades (hard wood floors) to the house. We hold approx 50% equity in our house. I like the idea of hammering the negative bank balance every paycheque. Thoughts?