xray

Any of you heard of this? The wife was watching TV a while back and she was intrigue with their mortgage offer. How it works is like a line of credit. You dump all your bills, mortgage, car financings, credit cards, etc into one account (hence their name, Manulife One). It gets compounded into one rate (prime), which is now at 4.75%.
We did a bit of reasearch on the net and had someone come over to the house to discuss it. They had a chart on their site in which you can plug in all your expenses and it calculates how much we save on our current mortgage. We could have our house paid off in under 10 years and actually saved $85,000 in interests. Sounds too good? Might be. I'm sure they are some loop holes. Such as the $3,400 we must pay in our mortgage penalty, the $14 monthly fee.
What I like about this account is that if we ever decide to buy a car down the road, we can use this account to pay it with cash. Which means we can get a cash deal on it and don't have to worry about the financing. I know that most new cars people buy do offer lower than prime rate, but I want to feel like a big shot and pull out that cheque book.

LEITNER

in this economy the last thing i want is a big debt. ie house/mortgage car payment etc... its all coming to a close and i owe nothing to anybody...YEEEEEAAAAH!!!

but i rent and own 2 older vehicles.

dachopstix

Technically, you could do that at any bank - what I did to refinance and consolidate was move my mortgage from PC Financial to my home bank, RBC, and basically opened a Line of Equity to pay off all of my debts, while still having a mortgage. The Line of Equity is based upon how much the mortgage is and how much your home is valued at. My rate right now is 4.55%.

mr cheesetoe

But a mortgage isn't bad debt beacuse the home will build equity. And with the market being down right now, it's a good time to buy.

LEITNER

until you loose your job. big financial woes are headed to north america.

xray

We also discuss that with an advisor in the event that one of us loses a job or being injured, we are protected against that. As long as you don't spend and go over the 80% of the value of your house.

SW20 MR2

http://www.milliondollarjourney.com/...e-mortgage.htm

xray

Yeah, we also checked out this site aswell. From what we read, you must have a lot of money to dump into this M1 account in order to trim down the interests. Not impossible, but achievable.

szuberi

for me...all depends on the rate they offer. not everyone will quality for prime + 0% or even a few basis points off of prime. your post above implies that the rate is set at prime for everybody which may not be the case.

its a good looking bundled offer....but may not work for everybody. for e.g. my two car loans are at 2.8% and 1.5%...now it wont make sense to transfer them over to a higher rate (prime will never drop to that level). i dont carry a credit card balanace and whatever debt i have...its all on a line of credit (priced similar to this product)

the other drawback i see is that when you mix everything together....you loose track of cash flow. for me...i wanna see income and expenses separately.

and can someone tell me how a mortgage is paid off sooner by 10 years using this product?

xray

True, I can see why this is not for everybody. Especially if your withdrawals is even or more than your deposits. That's why you have to have large sums of money to dump into it to save your interests. Not everyone has the low interest rates you have, Sal, so it might be better for people with higher interest rates to give it a good look at. We're not commited to it yet or if ever. Just wanted to get some solid feedbacks from anyone that has heard of this. Apparently, it's been around since 1997, so their credentials can't be too bad. There are a few other financial institutions out there that are in competition with them and have even offer prime minus up to 1% that we must look into first before we commit.
We looked at our consultant's data sheets and flow charts and it basically tracks every single penny in your account and where it goes. The 10 years thing is the process that acts like an accellerated mortgage in which you pay down your mortgage faster and that reduce the interests. Here's some more info if you like to take a look.
http://www2.manulifeone.ca/en/home/