1) Mortgage and HELOC Combined: The loan functions both as a mortgage and a line of credit. As you pay down the principal balance, the available credit increases, which you can borrow from as needed.

2) Reduces Interest Costs: Since the borrower’s deposits go directly toward reducing the mortgage balance, interest is calculated daily on the lower principal. This can significantly reduce the amount of interest paid over time, as interest accrues based on the current loan balance.

3) Flexible Access to Funds: Similar to a HELOC, borrowers can access the paid-down equity in their home at any time by withdrawing funds from the loan account. This makes it easy to finance expenses like renovations, medical bills, or other large costs without refinancing.

4) No Prepayment Penalties: Typically, these loans allow borrowers to pay down the mortgage faster without incurring penalties, providing more control over how quickly they reduce the loan balance.