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Using mortgage cash account as HISA (lemm.ee)

submitted 11 months ago by [email protected] to c/[email protected]

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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.

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[–] [email protected] 1 points 11 months ago* (last edited 11 months ago) (1 children)

So it's not even a HELOC, interesting. I wonder if there is a limit?

It says on the site it's not available with the smart fixed mortgage. I'm wondering if it's like open mortgage with a higher rate?

Edit. So I think only the pre payment money is available, and it's less flexible then a HELOC. But if you were saving for a big purchase like a trip or a car. I think it could work, unless that money can make more else where.

[–] [email protected] 2 points 11 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 11 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.🤣