I guess I don't understand. Doesn't any extra money you put in just go straight to paying down the principal?
It does. But you can also take it back out without incurring extra cost or interest. So I use it as a bank account. Drop $10k in, then if I want to buy something I can take it out.
My first thought was that that is a dangerous idea: treating your mortgage as a spending account.
But on second thought, I think it's really smart. I have a chunk of cash (emergency fund, if you will) that's just been sitting in an account earning 1.35% for years. Would have been way smarter to put that money against the mortgage at 2.9%, knowing that I could pull it out easily and with no fees if that emergency ever happens.
I wonder if my TD mortgage has a similar feature? Will have to look into this.