In Australia, mortgages are generally set up like home equity lines of credit, or HELOCs. They double as checking accounts, thus the term "money merge." When you get paid, you deposit your check into the account, and as you spend money you take it back out again. You hope to put more money in every month than you take out.
With a mortgage using the Australian method, interest is calculated daily instead of monthly, and because the money spends as much time as possible in the account before you take it back out to pay bills, you save on interest expense.
Some money merge programs require you to buy software for thousands of dollars. However, there's no magic formula for shifting your money around. "You don't need software to do that," Piercy says.
The biggest downside to the money merge plan is that it requires discipline. "You wouldn't do it unless you understood cash management," Piercy says.