Comments on: The High Cost of the Manulife One Mortgage http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm Building Wealth through Saving and Investing Fri, 19 Mar 2010 19:36:23 -0400 http://wordpress.org/?v=abc hourly 1 By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-111409 Allen Mon, 08 Mar 2010 03:56:10 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-111409 Ok, here's one for the pro's here: What do you think is the best thing to do should you be newly self employed such as myself? Pay a litte here and a lot there? Ok, here’s one for the pro’s here:

What do you think is the best thing to do should you be newly self employed such as myself? Pay a litte here and a lot there?

]]> By: mietek http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-111407 mietek Mon, 08 Mar 2010 02:26:30 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-111407 Caddy, I have been thinking about investing in a rental property. Do you use separate M1 account for that property or a sub account? How about deducting interest $ from your income? Can you do it? Caddy, I have been thinking about investing in a rental property. Do you use separate M1 account for that property or a sub account? How about deducting interest $ from your income? Can you do it?

]]> By: Caddy http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-111209 Caddy Thu, 25 Feb 2010 19:48:27 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-111209 What high cost of Manulife One? In 20 months my wife and I have decreased our mortgage by $85K and reduced our monthly interest payments from $865 to $385. Why would we care about paying a $14 monthly fee when we can pay off our mortgage in about 4 years and save 10's of thousands of dollars in mortgage interest. Who cares if you can find a 5 year fixed term at 1.65%. At the end of the five years, you will have paid very little off your principal and you'll get screwed by the new increased rates. Good luck in paying off your mortgage then. The calculations presented at the top of the page by Cannon Fodder do not represent what actually happens in a Manulife One account. To put it most politely, his calculations are grossly misleading. You don't make fixed payments in the Manulife One account. The very day that your paycheque is deposited into the account, it is already reducing the interest paid on the mortgage (your interest is calculated daily). Assuming you earn more than you spend, you are coming out a winner. If you are spending more than you earn, then you are simply irresponsible with your money. One thing is true...the Manulife One is not for those who have champagne tastes on a coca cola budget. If you're smart enough to take advantage of a Manulife One type of account, you'll thank yourself daily. If you want to be foolish with your money, then there isn't any account/mortgage that will save you. The Manulife One account has really given my wife and I an incredible head start. We're young, have paid off a huge portion of our mortgage, and have been able to afford a rental property in which we're profiting on. What else can I say? What high cost of Manulife One? In 20 months my wife and I have decreased our mortgage by $85K and reduced our monthly interest payments from $865 to $385. Why would we care about paying a $14 monthly fee when we can pay off our mortgage in about 4 years and save 10’s of thousands of dollars in mortgage interest.

Who cares if you can find a 5 year fixed term at 1.65%. At the end of the five years, you will have paid very little off your principal and you’ll get screwed by the new increased rates. Good luck in paying off your mortgage then.

The calculations presented at the top of the page by Cannon Fodder do not represent what actually happens in a Manulife One account. To put it most politely, his calculations are grossly misleading. You don’t make fixed payments in the Manulife One account. The very day that your paycheque is deposited into the account, it is already reducing the interest paid on the mortgage (your interest is calculated daily). Assuming you earn more than you spend, you are coming out a winner. If you are spending more than you earn, then you are simply irresponsible with your money.

One thing is true…the Manulife One is not for those who have champagne tastes on a coca cola budget. If you’re smart enough to take advantage of a Manulife One type of account, you’ll thank yourself daily. If you want to be foolish with your money, then there isn’t any account/mortgage that will save you.

The Manulife One account has really given my wife and I an incredible head start. We’re young, have paid off a huge portion of our mortgage, and have been able to afford a rental property in which we’re profiting on.

What else can I say?

]]> By: C http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110875 C Wed, 17 Feb 2010 04:24:31 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110875 Good to hear Mike, I have implemented the (borrowing to invest/smith maneuver) over the last 3 years using dollar cost averaging, and it is working out very very well. Good to hear Mike, I have implemented the (borrowing to invest/smith maneuver) over the last 3 years using dollar cost averaging, and it is working out very very well.

]]> By: Mike de Mahy http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110815 Mike de Mahy Tue, 16 Feb 2010 16:56:57 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110815 Many thanks to everybody for all your advices Scotia was very happy to accommodate us . The STEP is perfect for us. Thanks again for all your responses Mike d. Many thanks to everybody for all your advices

Scotia was very happy to accommodate us . The STEP is perfect for us.
Thanks again for all your responses

Mike d.

]]> By: C http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110795 C Tue, 16 Feb 2010 15:41:54 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110795 Why don't you go into scotia and ask to have your VRM converted to a STEP. They have a legal fee waiver program where as long as you have your daily banking with them and have a mtg and loc under the step they pick up the legal costs. Well worth it, and much better than a M1, and no monthly fee. I have a step with a a VRM and a fixed rate mtg, and 2 LOC's, and a travel visa, all secured by the home, has saved my 1000's per year. Why don’t you go into scotia and ask to have your VRM converted to a STEP. They have a legal fee waiver program where as long as you have your daily banking with them and have a mtg and loc under the step they pick up the legal costs. Well worth it, and much better than a M1, and no monthly fee.

I have a step with a a VRM and a fixed rate mtg, and 2 LOC’s, and a travel visa, all secured by the home, has saved my 1000’s per year.

]]> By: DG http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110794 DG Tue, 16 Feb 2010 15:37:30 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110794 Mike, you have a very good mortgage rate right now. If you throw it away and go with M1, you will have almost an extra $200 of interest expense per month. I think that money is best put towards reducing your debt rather than "buying flexibility". Can you think of any specific cases where flexibility of the M1 helps you? A regular mortgage with a LOC (which you have) can provide much of what M1 provides. Dan. Mike, you have a very good mortgage rate right now. If you throw it away and go with M1, you will have almost an extra $200 of interest expense per month. I think that money is best put towards reducing your debt rather than “buying flexibility”.

Can you think of any specific cases where flexibility of the M1 helps you? A regular mortgage with a LOC (which you have) can provide much of what M1 provides.

Dan.

]]> By: FrugalTrader http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110793 FrugalTrader Tue, 16 Feb 2010 15:36:02 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110793 Mike, the question you have to ask yourself is that if you tap into the equity of your home, are you going to spend it? M1 will not come anywhere close to the 1.65% mortgage that you have now. Mike, the question you have to ask yourself is that if you tap into the equity of your home, are you going to spend it? M1 will not come anywhere close to the 1.65% mortgage that you have now.

]]> By: Mike de Mahy http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110789 Mike de Mahy Tue, 16 Feb 2010 15:15:12 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110789 Hi Cannon The wife and i are really in a dilemma. Our mortgage is at 135000$ at a rate of 1.65% until 2013 (flexible Scotia) and a credit line of 50K maxed out Our net monthly income at 3100$. and expenses 2900 (includes everything taxes mortgage food etc.) We are frugal -have to , only one income We are debating this ManuOne account.Naturally , the Manu agent is pushing for us to take it , stating the flexibility and convenience of the plan. Is this plan good or not .Lots of comments .So many questions and so many different answers Mike d Hi Cannon

The wife and i are really in a dilemma. Our mortgage is at 135000$ at a rate of 1.65% until 2013 (flexible Scotia) and a credit line of 50K maxed out Our net monthly income at 3100$. and expenses 2900 (includes everything taxes mortgage food etc.) We are frugal -have to , only one income
We are debating this ManuOne account.Naturally , the Manu agent is pushing for us to take it , stating the flexibility and convenience of the plan.
Is this plan good or not .Lots of comments .So many questions and so many different answers

Mike d

]]> By: FrugalTrader http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110521 FrugalTrader Mon, 08 Feb 2010 12:13:40 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110521 Lisa, the alternative would be to get a readvanceable mortgage and use your home's equity that way. As well, the installment portion of your mortgage would have had a lower rate. Lisa, the alternative would be to get a readvanceable mortgage and use your home’s equity that way. As well, the installment portion of your mortgage would have had a lower rate.

]]> By: Lisa http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-110483 Lisa Sat, 06 Feb 2010 20:56:05 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-110483 We have had our Manulife account for 8 years now. We love the flexibility of it and that's why we chose it. We have increased our borrowings over time but we also have purchased 50,000 if investments, a waterfront cabin (right before prices skyrocketed) a new boat, dock, and boatlift, upgraded both vehicles and have lived a great lifestyle. Had we not chosen Manulife One the bank would have never loaned us the money to purchase the waterfront property (which has more than double in price) so you can go on all day long about points, percentages etc etc etc. The bottom line is you need to spend less than you earn and make sure your account is getting paid down. We will be completely debt free in 2 years and 9 months including our principle house and are considering a third property purchase. This would have NEVER been possible with a convential mortgage. We have had our Manulife account for 8 years now. We love the flexibility of it and that’s why we chose it. We have increased our borrowings over time but we also have purchased 50,000 if investments, a waterfront cabin (right before prices skyrocketed) a new boat, dock, and boatlift, upgraded both vehicles and have lived a great lifestyle. Had we not chosen Manulife One the bank would have never loaned us the money to purchase the waterfront property (which has more than double in price) so you can go on all day long about points, percentages etc etc etc. The bottom line is you need to spend less than you earn and make sure your account is getting paid down. We will be completely debt free in 2 years and 9 months including our principle house and are considering a third property purchase. This would have NEVER been possible with a convential mortgage.

]]> By: Paul http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-108673 Paul Sat, 19 Dec 2009 22:18:57 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-108673 Allen, My feeling is that with the conventional mortgage we'll be in a better situation financially because the money will automatically go into paying down the mortgage. If we were disciplined, I agree that the M1 concept is quicker to pay down than a conventional mortgage; however, the past 5 years have told us that we aren't disciplined. Allen,

My feeling is that with the conventional mortgage we’ll be in a better situation financially because the money will automatically go into paying down the mortgage.

If we were disciplined, I agree that the M1 concept is quicker to pay down than a conventional mortgage; however, the past 5 years have told us that we aren’t disciplined.

]]> By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-108672 Allen Sat, 19 Dec 2009 17:24:57 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-108672 Paul, There is no reason to say that you would not do the same with the RBC. Yet in my recent experience they will provide you nothing to assist you in getting out of debt faster beyond the 20% payment increase. This is difficult if you are limited in cash flow or have less drive to get it done. Personally, it has lots to do with the personal relationships that you have and I had a really god one with a planner there for a number of years. She retired and now I have this kid that couldn't find his way out of a paper bag with the bottom cut out. His response is "ask your mom for help". Well, I make and payback nearly 5x what my mom does in a year. The only difference there is that she is mortgage free and I am not. I'm still convinced that if you can do it right the ML1 method (not necessarily their product) is the best way to get it done. Paul,

There is no reason to say that you would not do the same with the RBC. Yet in my recent experience they will provide you nothing to assist you in getting out of debt faster beyond the 20% payment increase. This is difficult if you are limited in cash flow or have less drive to get it done.

Personally, it has lots to do with the personal relationships that you have and I had a really god one with a planner there for a number of years. She retired and now I have this kid that couldn’t find his way out of a paper bag with the bottom cut out. His response is “ask your mom for help”. Well, I make and payback nearly 5x what my mom does in a year. The only difference there is that she is mortgage free and I am not.

I’m still convinced that if you can do it right the ML1 method (not necessarily their product) is the best way to get it done.

]]> By: Paul http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-108668 Paul Sat, 19 Dec 2009 15:35:46 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-108668 We've had an M1 for over 5 years. In that time, we've actually increased our debt. I think in concept the M1 sounds like a good idea; however, you have to be very disciplined. Obviously, these all-in-one HELOC's were created because they know that the majority of us aren't disciplined enough and will continue to use this extra credit. Having said that, we are converting back to a conventional variable mortgage and dramatically reducing our LOC. We're looking at the RBC Homeline right now since we're already an RBC customer. We’ve had an M1 for over 5 years. In that time, we’ve actually increased our debt. I think in concept the M1 sounds like a good idea; however, you have to be very disciplined. Obviously, these all-in-one HELOC’s were created because they know that the majority of us aren’t disciplined enough and will continue to use this extra credit.

Having said that, we are converting back to a conventional variable mortgage and dramatically reducing our LOC. We’re looking at the RBC Homeline right now since we’re already an RBC customer.

]]> By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-108624 Allen Thu, 17 Dec 2009 17:00:55 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-108624 Mietek, I am beginning to think you could be right. The run around I am getting from the RBC right now on a number of things relating to rate increases are incredible, I have contacted my ML1 rep again and want to look at this in more detail. Mietek,

I am beginning to think you could be right. The run around I am getting from the RBC right now on a number of things relating to rate increases are incredible,

I have contacted my ML1 rep again and want to look at this in more detail.

]]> By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-107441 Allen Sun, 22 Nov 2009 16:43:34 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-107441 Well, I've decided for the interim that using my existing RCL as my suo version ML1 account will work just as well. I have set up everything to get paid from and depositted to that account. So far so good. Not really simple but it will work for a while. Things are getting bumpy in the employment for the next quarter so I went back to the RBC and said hey can we get this RCL limit increased for a just in case situation, the answer was not a chance, in fact the RCL's interest rate programs are all getting adjusted to increase their rates to reflect this new reality we are in. New reality? since when does the RBC give a rat's ass about it's customers? The fees prove that. I don't know what all that means but we will see. Well, I’ve decided for the interim that using my existing RCL as my suo version ML1 account will work just as well. I have set up everything to get paid from and depositted to that account. So far so good. Not really simple but it will work for a while. Things are getting bumpy in the employment for the next quarter so I went back to the RBC and said hey can we get this RCL limit increased for a just in case situation, the answer was not a chance, in fact the RCL’s interest rate programs are all getting adjusted to increase their rates to reflect this new reality we are in. New reality? since when does the RBC give a rat’s ass about it’s customers? The fees prove that.

I don’t know what all that means but we will see.

]]> By: mietek http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-107436 mietek Sun, 22 Nov 2009 04:07:30 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-107436 I know this would sound ridiculous for most of people but if I was in your shoes I would pay the penalty and move to M1 or "All-in-one" or whatever it is called. $13,000 would disappear pretty quickly and your financial "problems" would seize to exist the moment you switch. That's how I feel about it right now and the only thing I regret, is that I did not sign up for it much sooner. I am the ManulifeOne customer for a while now and I've never been happier with my finances. If you want to save $14 go to Canadian Tire or National Bank and be $14 happier. Anyway, everybody is different and everybody's life styles or priorities are different. Some people need more vitamine C and some need more vitamine D. Some of us have 2.5% mortgage and laugh at people that pay 3.25% interest and some of us don't have any mortgage ... You have to decide for yourself. Don't let any reps (even the one from M1) decide for you, and you will never regret it. I hope you'll find peace of mind and happiness soon. I know this would sound ridiculous for most of people but if I was in your shoes I would pay the penalty and move to M1 or “All-in-one” or whatever it is called. $13,000 would disappear pretty quickly and your financial “problems” would seize to exist the moment you switch. That’s how I feel about it right now and the only thing I regret, is that I did not sign up for it much sooner. I am the ManulifeOne customer for a while now and I’ve never been happier with my finances. If you want to save $14 go to Canadian Tire or National Bank and be $14 happier. Anyway, everybody is different and everybody’s life styles or priorities are different. Some people need more vitamine C and some need more vitamine D. Some of us have 2.5% mortgage and laugh at people that pay 3.25% interest and some of us don’t have any mortgage … You have to decide for yourself. Don’t let any reps (even the one from M1) decide for you, and you will never regret it.
I hope you’ll find peace of mind and happiness soon.

]]> By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-107035 Allen Mon, 09 Nov 2009 21:01:58 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-107035 Well, after much consideration it would seem that the only person I have talked to over this specific situation that understands why I want to be debt free is the rep from ML1. The Credit Union with all their restrictions and chequing accounts tied to each of the LOC's doesn't make this any simplier. In fact they don't get it. I don't want to be in debt and I feel that is can be done but because of the excessive $13K penalty on the existing RBC mortgage it can't be done as simply as I would like it to be. That is a shame really. If I had done this 3 years prior before the realestate market corrected itself there would be more room to make this work. Right now it doesn't. The simple reality is that I was looking for a massive operating LOC but that no one lending group was interested in taking it on. Any other suggestions? Well, after much consideration it would seem that the only person I have talked to over this specific situation that understands why I want to be debt free is the rep from ML1. The Credit Union with all their restrictions and chequing accounts tied to each of the LOC’s doesn’t make this any simplier.

In fact they don’t get it.

I don’t want to be in debt and I feel that is can be done but because of the excessive $13K penalty on the existing RBC mortgage it can’t be done as simply as I would like it to be.

That is a shame really. If I had done this 3 years prior before the realestate market corrected itself there would be more room to make this work. Right now it doesn’t.

The simple reality is that I was looking for a massive operating LOC but that no one lending group was interested in taking it on.

Any other suggestions?

]]> By: Allen http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-107027 Allen Mon, 09 Nov 2009 16:23:11 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-107027 Thanks. Currently, the credit union I have been talking to is now telling me that it may not make sense to move due to the penalty of the existing mortgage at the RBC. This is similar to the conversation I had with the rep from ML1 and now puts me in a bit of a bind. The credit union is now saying that if rates climb I won't save the sort of money I have been considering yet with the recent press releases of BofC it indicates that there won't be any increases in the prime rate until the economy starts to really show signs of strength. If that happens soon it won't really matter much but if it happened later than the outstanding 27 months I have left on this mortgage then I would have missed out on the lower rates over that time. I must be missing something key. Thanks.
Currently, the credit union I have been talking to is now telling me that it may not make sense to move due to the penalty of the existing mortgage at the RBC. This is similar to the conversation I had with the rep from ML1 and now puts me in a bit of a bind. The credit union is now saying that if rates climb I won’t save the sort of money I have been considering yet with the recent press releases of BofC it indicates that there won’t be any increases in the prime rate until the economy starts to really show signs of strength. If that happens soon it won’t really matter much but if it happened later than the outstanding 27 months I have left on this mortgage then I would have missed out on the lower rates over that time.

I must be missing something key.

]]> By: mietek http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm/comment-page-3#comment-107009 mietek Mon, 09 Nov 2009 02:47:19 +0000 http://www.milliondollarjourney.com/the-high-cost-of-the-manulife-one-mortgage.htm#comment-107009 2.35%, 3.25%, 5.25% ...That's not what M1 account is about. It is about paying your motgage off 3 or 4 times faster than in a "regular" arrangement. When I was with RBC I always pumped some or most of my "left over" income into the mortgage in order to reduce it fast but ended up being stressed out every single day thinking if I had enough money for anything else and using line of credit to cover my shortages. Now every single dollar of my income reduces the principal right away and there is no stress!!! That's the main element of this amazing system, not the interest rate! All of you so called mortgage specialists can argue as much as you want but I guarantee that I'd pay my mortgage off quicker with 3.25% rate than with a 1.5% rate in a traditional deal. You don't need a software or even a calculator to prove it. A calendar and a total of what you owe is enough. Allen, don't make your life too complicated. You might forget how to enjoy it. 2.35%, 3.25%, 5.25% …That’s not what M1 account is about. It is about paying your motgage off 3 or 4 times faster than in a “regular” arrangement. When I was with RBC I always pumped some or most of my “left over” income into the mortgage in order to reduce it fast but ended up being stressed out every single day thinking if I had enough money for anything else and using line of credit to cover my shortages. Now every single dollar of my income reduces the principal right away and there is no stress!!! That’s the main element of this amazing system, not the interest rate! All of you so called mortgage specialists can argue as much as you want but I guarantee that I’d pay my mortgage off quicker with 3.25% rate than with a 1.5% rate in a traditional deal. You don’t need a software or even a calculator to prove it. A calendar and a total of what you owe is enough.
Allen, don’t make your life too complicated. You might forget how to enjoy it.

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