A Sydney mortgage manager, WealthMaker Home Loans, has launched a mortgage product that puts a portion of the monthly loan repayment into an investment account. Bearing some similarities to the endowment mortgages that were sold by life insurance companies in the 1990s, the WealthMaker loan is designed to allow people to buy a home and build an investment portfolio at the same time.WealthMaker's managing director, Michael McAlary, said the company has warehouse funding from Westpac and another bank. It has its own sales force selling the loan, which it calls Aspire, and it has distribution agreements with a financial planning group and with some brokers. It is presently negotiating third-party arrangements with the banks.Speaking at the AB+F Mortgage Innovation conference in Sydney yesterday, McAlary said customers would take out a loan that looks like a standard mortgage. However, 30 per cent of the monthly payment that would be allocated to principal repayment is then used to buy units in an indexed Australian share fund.WealthMaker's modelling (using historical mortgage rates and S&P/ASX 300 returns) indicates that around 22 years into a 30-year loan borrowers could use their investment account balance to pay off the loan. Borrowers will have to do some calculations to work out whether it is to their advantage to pay a loan with the after-tax benefits from an investment account. Alternatively, they could keep paying the mortgage and continue to build the investment account.Just in case the investment plan results in a catastrophic failure, Aspire includes "gap protection", which covers any shortfall at maturity."You will always own your property at the end of the loan term, provided you have made all your loan repayments," Aspire's marketing brochure says.McAlary said there were no restrictions in terms of loan size or loan-to-valuation ratio; borrowers could expect to get a standard mortgage at competitive rates.He said the comparison with endowment mortgages was not valid. Most endowment mortgages were interest-only loans, which meant that the borrower had to use the investment account balance to repay the principal at maturity. Endowment mortgages did not have guarantees either.McAlary said that once the product is established in the market, WealthMaker would look at adding some variations, such as different investment options.