The Manulife "One" Account

[psicodude]

I am just wodering if anyone can give some advice or experience with the Manulife "One" account, or a competitor's similar product. I am looking at ways to save some money every month and pay off the mortgage quicker, and am considering this as an option. They have a great sales pitch that makes everything sound awesome, but there has to be some drawbacks that I am not aware of...right?

Just in case you want to know wtf I am talking about, this is their website: http://www2.manulifeone.ca/en/home/

Thanks for the help.

[mac_gurl]

Thank you for bringing this up. We had been wondering about it as well. I just did the thing, where you calculate your number, and it says my house and car would be paid off in 9 years, as opposed to 16years. I'd really like to know how this works.

[Bobblehead]

Paging Slava...

3....2....1.....

[ken0042]

The one thing that happens is your paycheque goes right against your mortgage that very day, and then your daily transactions (groceries, bills, etc.) go back against your mortgage, meaning there are more days per month where the principal of your mortgage goes down. Same way that a by-weekly payment plan will pay off a 25 year mortgage a couple of years quicker than semi-monthly.

There are really 2 pitfalls for me that I can see:

- Doing the calculator works great, however if you have any amount left over at the end of the month it gets applied to the mortgage. So the calculator looks awesome simply because I didn't include the $3 a day I spend on coffee, and the $100 a month I spend on booze.

- One would have to have a good handle on their finances to pull this off. I already know I suck at handling credit, and knowing I could put a plasma TV against my mortgage at any second is a little too much tempation for me.

[psicodude]

Originally Posted by ken0042

- One would have to have a good handle on their finances to pull this off. I already know I suck at handling credit, and knowing I could put a plasma TV against my mortgage at any second is a little too much tempation for me.

Yeah, that's the first thing that came to mind for me as well.

A guy I know says he uses a lot of the credit to buy income-generating stocks, and then puts that back into the account which pays it down even quicker.

Anyway, I still hope to hear from some of the experts.

[DementedReality]

i am no expert, but i do have the M1.

So far its been as advertises. Let me add a few notes though.

1) it has been awesome for my marriage! i never worry about money or have to tell my wife to wait another day to go grocery shopping. frrankly, for point #1 alone, i love it.
2) as per #1 .. cash flow is no longer an issue. if we need something we have the money.
3) i rarely withdrawl cash from it. i use my CC for everything and pay it off at months end.
4) i dont stress if the phone bill is due 4 days before payday.
5) your cash flow increases greatly, but you have to be disciplined to not spend it.
6) you really get to focus on your debt level. do you really have $10,000 in an ING account when you have a $250,000 mortgage? if i need that $10k, i can get it anytime with M1 but at least while I am not needing it it is saving me interest (and not generating a measly taxable income).

in my case, i got rid of an RRSP loan, a trailer loan and a medium size CC payment and cut those payments almost in third.

ultimatly, i think once I get a better handle on how to manage it, i might shut it down (sorry slava). the reason? there are cheaper ways to get the same result. right now, you pay M1 a premium on the interest rate vs getting an ala carte HELOC and chequing account. The M1 interest rate is prime, usually a HELOC is prime - .5 or better.

[photon]

Originally Posted by DementedReality

The M1 interest rate is prime, usually a HELOC is prime - .5 or better.

Actually I'd like to know where you're getting those. I have two HELoCs at prime - .5 and every mortgage broker I've spoken with since has told me to hang onto them because they're not that easy to come by. The only one I know that advertises anything similar is ATB and it's only 0.5 off for the first year or something.

More than .5 off I'd really like to know where

[DementedReality]

Originally Posted by photon

Actually I'd like to know where you're getting those. I have two HELoCs at prime - .5 and every mortgage broker I've spoken with since has told me to hang onto them because they're not that easy to come by. The only one I know that advertises anything similar is ATB and it's only 0.5 off for the first year or something.

More than .5 off I'd really like to know where

dont know ... havent shopped recently ... however, you are right .... in todays enviroment it might be difficult, but since we are talking about open and variable rate mortgages, over the long term i am sure you will benefit outside the M1.

not to bash the M1, the convienence of the bundle has value. just a point that a more sophisticated financial mind could probably reduce the cost by going ala cart.

[Rathji]

PM Slava and he can hook you up. I woulda done it on my recent house purchase but I would have needed 10% down which I couldn't swing

[Sylvanfan]

I was looking at this the other day and was considering what it would and wouldn't do.

If you are a disciplined investor than you can get better rates on your primary residence than what the Manulife One account will offer, and have much of the same pay down flexibility that Manulife One offers. It is very convenient though for people as it allows them to always have some type of cash flow so long as there is some equity in their home. But if you don't have a lot of spending discipline...you might keep finding ways to just spend the money on a vacation, that T.V. and other depreciating things. But it does give people the option to leverage 90% of their homes value whereas traditional morgage and line of credit for prime or prime minus often is only 75%.


One thing Manulife one offers is a revenue property account in the 33 largest markets in Canada. Thats nice in the regard that it will keep track of all the money in and out on each property. So if you have to fix the place up you can use that account and it will keep all the records for you.

[Slava]

As alluded to earlier in the thread I know the ins and outs of these accounts. I've had mine running for about 4-5 years now and I doubt I'll ever go back to a traditional mortgage again.

There are good points and bad points here, with one main hurdle being the discipline to work with the account. In our office we have devised a couple of ways to help mitigate that risk; although nothing is fool-proof!

As far as that income generating stocks comment, that strategy is doable...but obviously riskier. I could show you dozens of investments that will provide you a very steady and set income. You can run this into your mortgage and pay it off sooner. The problem to me is that when the market drops (as it has for the past month or so) your income stream is at risk...suddenly what was once covering your mortgage payment is no longer doing so. Its not the end of the world, but still not a feeling that you're likely to embrace!!

If you want to PM me questions or anything like that feel free. Of course I will keep checking this thread if you want me to reply here. I should disclose that I'm a "Manulife guy"...so I do have a bit of a vested interest here and I do earn money on these accounts.

[DementedReality]

Originally Posted by Slava

... I do earn money on these accounts.

oh ya, i forgot about the lunch you owe me!

we can discuss some of those strategies for managing the risk of overspending due to the access of M1.

by the way, i havent heard about any more Stratomatic games, were the Canucks kicked out?

[Slava]

Originally Posted by DementedReality

oh ya, i forgot about the lunch you owe me!

we can discuss some of those strategies for managing the risk of overspending due to the access of M1.

by the way, i havent heard about any more Stratomatic games, were the Canucks kicked out?

A) I'm still more than willing to buy you lunch! How do you feel about the Lions Den? !! (j/k)

B) The Red Wings won the whole thing in the SOM Hockey if my memory serves me correctly!

C) From your description above you sound like you have the strategies figured out pretty well? Especially if you're looking at doing this "a la carte". (Although to be honest I'm not really sure what that means...just using your term there).

[troutman]

Originally Posted by DementedReality

by the way, i havent heard about any more Stratomatic games, were the Canucks kicked out?

[SOM has slowed down for the summer, but we might try and finish off the season before the new cards come out. Then, we will want at least 8 gms to run teams for our new season].

[psicodude]

Originally Posted by Slava

As alluded to earlier in the thread I know the ins and outs of these accounts. I've had mine running for about 4-5 years now and I doubt I'll ever go back to a traditional mortgage again.

There are good points and bad points here, with one main hurdle being the discipline to work with the account. In our office we have devised a couple of ways to help mitigate that risk; although nothing is fool-proof!

As far as that income generating stocks comment, that strategy is doable...but obviously riskier. I could show you dozens of investments that will provide you a very steady and set income. You can run this into your mortgage and pay it off sooner. The problem to me is that when the market drops (as it has for the past month or so) your income stream is at risk...suddenly what was once covering your mortgage payment is no longer doing so. Its not the end of the world, but still not a feeling that you're likely to embrace!!

If you want to PM me questions or anything like that feel free. Of course I will keep checking this thread if you want me to reply here. I should disclose that I'm a "Manulife guy"...so I do have a bit of a vested interest here and I do earn money on these accounts.

Thanks for the response Slava.

Is the Manulife1 solution basically an automated version of an readvanceable mortgage? Or, are there other benefits? I guess I am asking if it is possible to do exactly what Manulife does with other institutions? Feel free to answer in PM if you want.

[DementedReality]

Originally Posted by Slava

C) From your description above you sound like you have the strategies figured out pretty well? Especially if you're looking at doing this "a la carte". (Although to be honest I'm not really sure what that means...just using your term there).

ala carte means getting a HELOC and chequing account seperate as opposed to the bundled option M1 provides. it can be done and provides the net results of M1, but requires much more maintenence.

PM me ... lets get together!

[Slava]

Originally Posted by psicodude

Thanks for the response Slava.

Is the Manulife1 solution basically an automated version of an readvanceable mortgage? Or, are there other benefits? I guess I am asking if it is possible to do exactly what Manulife does with other institutions? Feel free to answer in PM if you want.

It is basically a re-advanceble mortgage or revolving credit. The easiest way to think about this is like a giant line of credit, with a chequing account attached to it. The line of credit also happens to hold your mortgage amongst other debts that you decide to consolidate (if there are any).

Every time you make a deposit the funds go right against your debt. In other words if your mortgage was $250k and you deposit $3000 then the balance moves to $247k. You can still spend this money as you wish, but as the money sits there the interest is calculated on the $247k. The longer the money sits there before you spend it (on bills, or groceries or whatever you spend your money on!) than you save interest. Over the long term this interest adds up and you can save a lot.

Also you have the flexibility to pay this down as fast or slow as you would like. This is where you can get in trouble. Theoretically you can set-up this account and pay interest only for the rest of your life...clearly this is not the point! On the flip-side you can put as much against the account as you like without penalties. You can also borrow up to your limit without having to re-apply. This is awesome if you need a new car for example...you can head to the lot and cut a cheque for a vehicle that day without having to apply for credit or anything. The buying power is nice depending on your discipline and what you would use it for.

Fact is that using a pretty simple strategy or two you can save a pile of money through the years, and really increase your net-worth. If you have no discipline, just realise that going in and make sure that you set something up so that you can make sure to be able to make headway with the mortgage; its not that hard and can be done.

[Finner]

How do mortgages work on this "One" account? Do you have to have a preexisting mortgage? Or can you set one up right in the account?

[Slava]

Originally Posted by Finner

How do mortgages work on this "One" account? Do you have to have a preexisting mortgage? Or can you set one up right in the account?

Well the mortgage is the account. You can set this up by transferring a mortgage over or you can set this up as your mortgage.

[SeeGeeWhy]

Is it true that you are required to put 20% down in order to get this?