March 17, 2017
This is how a leading consumer research firm describes the Index Mortgage:
“The Index Mortgage is an entirely new approach to mortgage lending.
The most initial interest was shown by more sophisticated investors and offset mortgage holders.
The Index Mortgage is unique. It provides the raw materials for the development of a whole new generation of financial products that combine mortgages with investments.
Looking past the launch phase and further into the future (imagining what the market will be like in 5 years or so). In the new market, most consumers will buy their investments from their mortgage provider. The mortgage provider could meet most households’ financial needs, short, medium and long-term. At the minimum, it will become the norm to keep your investments “in” your Index Mortgage – it would be stupid not to.
In the past, consumers have resisted attempts by (primarily) banks to build this sort of institution, because there has been no incentive to “put their eggs in one basket”. The Index Mortgage provides a strong incentive and we believe it will drive a sea change in the mortgage market.
One advantage of the Index Mortgage is that it does not require any ‘relearning’ and is relatively easily explained using well understood terms.
Once people understand the (reasonably) simple principle of “you don’t pay tax because you are reducing what you owe, not earning income”, sheltering their investments “in” their mortgage was a “no brainer” (to use their words).”