Personal Finance Canada

1139 readers

2 users here now

Come and discuss anything related to personal finance, directly or indirectly, with other Canadians!

founded 1 year ago

MODERATORS

[email protected]

Using mortgage cash account as HISA (lemm.ee)

submitted 9 months ago by [email protected] to c/[email protected]

11 comments fedilink hide all child comments

Anybody have experience using BMO mortgage cash account? This is where you can pre-pay down the principle and then supposedly withdraw those funds when needed. I’ve been frustrated by the terms and conditions on my daily HISA so thinking this could be a way to get the equivalent of 5.15% (my current mortgage rate) for money that I don’t need to touch frequently. Seems like I can’t do better than this even in a HISA ETF.

My concerns are: am I thinking about this the right way? (Paying down principle on mortgage is equivalent to earning that percentage in a regular bank account?). Does this BMO mortgage feature really work like this? It wasn’t advertised to me, I had to dig into it.

you are viewing a single comment's thread
view the rest of the comments

[–] [email protected] 2 points 9 months ago (1 children)

Only the pre payment money is available to withdraw. I can prepay up to 20% of my mortgage every year. This feature of withdrawing your prepayment is available on regular BMO mortgages, I just switched to BMO in a 3yr fixed because they gave me the best rate.

My personal banking is with simplii and I’m not impressed with their HISA so thought about this scheme as a replacement.

[–] [email protected] 1 points 9 months ago

Interesting!

I wouldn't really call it a scheme. Saving that interest while you prepay, pays down your mortgage quicker.

You just have to look at the numbers and with rates so high right now I think it makes sense. But I am not an expert.🤣