Quote:
Originally Posted by Slava
I know that I'm likely going to get flamed for this, but I'm just going to say it anyway. Products such as Manulife One are much better than a conventional mortgage.
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I agreed with you and I looked into Manulife One or the option of a home made approach using a HELOC and internet banking. I don't mind moving money around all the time so I figured I could get pretty close to representing the M1 account. It all looked great and I was ready to set it up until the interest rate discussion came up. M1 and Lines of Credit have a variable interest rate and the best offer I could get was prime, currently 3%. With a variable rate mortgage the rate was prime minus 0.75% or 2.25%. On a $300000 mortgage the interest difference is $2250 for the year. To save money by continuously putting all the money you have in your bank against the outstanding mortgage you would have to maintain an average balance of $75000 in your accounts. I ran through a bunch of scenarios and could not get past the 75 point interest rate difference.