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Our goal is to make sure our clients (as well as perpetual information seekers) are well educated. You'll find The Shred Method™ Blog to be a mix of articles about financial literacy, infinite banking, investing, crypto, and a host of other topics related to our way of managing cash flow. If you're curious about thinking differently, you've come to the right place. We're contrarian in all the right ways.

Is this like... an Australian Mortgage?

May 02, 2022

In Australia, a majority of homeowners will own their home outright far faster compared to Americans in similar income brackets. The main reason is Australian banks offer something called a Sweep Account — essentially a line of credit that is used to pay down debts quickly. The Sweep Account is much like a checking account with a payday advance attached to it. Australians deposit their income into the Sweep Account and pay all of their bills from that account. From time to time, they’ll leverage more than they have available in liquid savings (cash) and blast away chunks of higher interest debt. The end result is a paying off/down of debt in rapid fashion. 

The main reason the Australian Mortgage hasn’t caught on in the US is the lack of understanding by American consumers (and candidly the banking industry). Where in Australia, these sweep accounts are easier to obtain, in the US, in can take upwards of 1-2 months to open a HELOC (Home Equity Line of Credit). 

Purely speculation, but we believe that the U.S. banking industry has purposefully sidestepped programs like these because they eat into the lenders’ profit.

Is this like... Velocity Banking?  Let's find out...