[mperich]

hey guys,

I had an accepted offer on my first house today (wooo), and already had a mortgage in place..but a friend of mine works at freedom 55 and thought he could get me a better rate. Anyways he can get me a bit better rate (i think 5.05 which is prime -.95 here in canada) but he thought a good idea would be their "innovesting" mortgage.

Basically as far as I can tell (and im sort of a finance newbie) its a line of credit at 6%. It requires that I have 25% equity in the house. As I pay down the mortgage the line of credit becomes free for me to leverage with if I want (which i probably wont but its there if i need it, also if i ever went busto etc I could go into the line of credit) Also, at the start about 30% of my down payment is basically leveraged (again this is flexible and im not sure what i should do here) and put in a seperate investment account where it is left until my mortgage is equal to the investment account, when it is redeemed and used to pay off the mortgage. Again I guess thats theoretical as I could sell the investment account whenever I think, or also keep it after the mortgage is done and just pay the principal monthly until it reaches 0.

One more thing is that in Canada this will create a tax break for me since the interest on leveraged money is tax deductable I believe, whereas interest on mortgages is not in canada.

So yah I guess the +'s are the tax break, and the flexibility to pay off the mortgage as fast as I want basically. The -'s would be the higher interest rate and...???

Thanks for any insight,

-Mike