I'm pretty sure I know what you are talking about. We looked into it this year in Canada (advertised by canadian tire, some others). It looked too good to be true. I popped in my info in the online calculator and it sounded awesome! It would save us 6 years off our mortgage. THEN I realized what the trick was. It has you calculate everything you are paying currently on debt- we were paying 1000/month extra at that time to try to get rid of line of credit(something that was just barely doable) and it assumes we would keep putting an extra thousand on the home for the life of the mortgage. All very well IF we could make it work for the 6 years that would be left on the mortgage BUT the biggest catch of all- if you go into the negatives AT ALL you will be adding to to the principal on your mortgage. It works that way because (if this is the right product I am thinking of) all your mortgage,chequing,savings, loans- everything becomes one account and so, although each paycheque is applied directly to your principal which is great, each time you overdraw your account, or access credit, you are increasing the mortgage principal and thus adding interest to it. The salesperson on the phone basically told us you can get pretty screwed if you access your available credit (they give you a HUGE amount of credit d/t home equity- ours was about 100,000) or if you use overdraft (even a few dollars) on a fairly regular basis (I forget exactly why it works this way).It was too risky for us- worried about changing economy and "what if's" down the road.
When I used the calculator again- decreasing the extra we could put on our debt each month the savings dropped a ton. Down to only saving about 4-5 months off the mortgage.
Hopefully I am talking about the same product here!
