精华 Traditional Mortgage and Manulife One

[小地主]

Hello,

Is there anyone here use Manulife One instead of traditional mortgage?

Manulife One

I was strongly recommended by a friend to use Manulife One to pay off the house. But after reading what they put on their web, I cannot see its advantage compared with traditional mortgage combined with home equity line of credit...

Any inputs?

 

[西西妈]

挺好，非常适合平时账户上总有闲钱趴着去哪也不一定，或者干脆就不用的家庭。
这个形式和传统房贷的差别就是银行里只要一分钱当天不用，当天都在省那一分钱的利息。而传统房贷是不允许零存整取的。
以前我们用过BMO的一个带所谓cash account的房贷，就用得特好，可惜现在没有了。这个相比下省得更厉害。条件合适的，真是很划算啊！

 

[caimin]

BMO Mortgage 都有类似的功能， 叫 Mortgage Cash Account。 如果你选择 Variable Rate Mortgage， 又能灵活运用这项功能， 就像楼上所说：省得更厉害！详细的性息可以到BMO 的网站上查询。

 

[小地主]

Thanks YY. See you on June 14th...

caimin, could you please leave me your phone number? I lost it...

 

[Timothy's]

I did some research in Manulife One before. It is not good for people only have mortgage debt. The interest is prime rate. A variable rate mortgage is prime – 0.75 or better. A 200,000 mortgage is 200,000 X 0.75% = 1500 dollars more. If you usually keep 10,000 in a cash account without much of interest 10,000 X 5% = 500 dollars. So 1500-500 = 1000 dollars more. If you have other debt like credit card cost you more than 1000 dollars a year than you can save some money.
My co-worker switch to it after I gave him researching result. He has four sons in university now or would be in next year. He is spending more than he earns and adding on more credit card debt. He switched to Manulife One and used it as low cost line of credit, and get ride of credit card debt. It saves him lot of money.

 

[Danieljiang]

I did some research in Manulife One before. It is not good for people only have mortgage debt. The interest is prime rate. A variable rate mortgage is prime – 0.75 or better. A 200,000 mortgage is 200,000 X 0.75% = 1500 dollars more. If you usually keep 10,000 in a cash account without much of interest 10,000 X 5% = 500 dollars. So 1500-500 = 1000 dollars more. If you have other debt like credit card cost you more than 1000 dollars a year than you can save some money.
My co-worker switch to it after I gave him researching result. He has four sons in university now or would be in next year. He is spending more than he earns and adding on more credit card debt. He switched to Manulife One and used it as low cost line of credit, and get ride of credit card debt. It saves him lot of money.

thanks, very useful information

 

[小地主]

what's the difference between this kind of mortgage & sub-prime mortgage? To me it's like at the bank's interests as you put every dollar you earn into that account, so the bank will get the maximum cash if the home owner got bankrupt?

I do agree with YY as you will pay less interests and there is no limit on lump-sum payment you put into the account for our "normal" people, maybe it's a win-win method here..

 

[dalong]

恕我直言，你这样算的好象不对。我是这样考虑的，你看对不对啊。

首先，你在储蓄账户内的利息是日累计的，10000的利息应该会比你算的500高。其次，这个plan整个就是在打时间差，你在储蓄账户里的钱并不只是你的存款, 而是你的家庭收入，在你没付帐单之前，你就在收利息，而且从它网站来看，这等于直接减少本金（传统意义），时间差也是省利息的。但传统的房贷没有这个便利。如果家庭收入高，费用高的家庭很适用呢。规划好支付费用的时间，风险并不大，就是得算清利和弊，弊就是那。75的差异，还有这个借款利息有固定利息吗？anyway 谢谢小宝妈提供的这个信息。

I did some research in Manulife One before. It is not good for people only have mortgage debt. The interest is prime rate. A variable rate mortgage is prime – 0.75 or better. A 200,000 mortgage is 200,000 X 0.75% = 1500 dollars more. If you usually keep 10,000 in a cash account without much of interest 10,000 X 5% = 500 dollars. So 1500-500 = 1000 dollars more. If you have other debt like credit card cost you more than 1000 dollars a year than you can save some money.
My co-worker switch to it after I gave him researching result. He has four sons in university now or would be in next year. He is spending more than he earns and adding on more credit card debt. He switched to Manulife One and used it as low cost line of credit, and get ride of credit card debt. It saves him lot of money.

 

[小地主]

恕我直言，你这样算的好象不对。我是这样考虑的，你看对不对啊。

首先，你在储蓄账户内的利息是日累计的，10000的利息应该会比你算的500高。其次，这个plan整个就是在打时间差，你在储蓄账户里的钱并不只是你的存款, 而是你的家庭收入，在你没付帐单之前，你就在收利息。但传统的房贷没有这个便利。如果家庭收入高，费用高的家庭很适用呢。规划好支付费用的时间，风险并不大，就是得算清利和弊，弊就是那。75的差异，还有这个借款利息有固定利息吗？anyway 谢谢小宝妈提供的这个信息。

Another 弊 is, you may want to consolidate all your bank accounts to this account as every dollar counts, but it's really inconvenient as it doesn't have too many ATMs for you to withdraw cash, and it has monthly transaction fee which seems not waived..

But, you may pay out mortgage much sooner than the traditional one.. you don't have the maximum cap for the lump sum payments.. actually you are paying lump sum every pay day..

 

[Timothy's]

恕我直言，你这样算的好象不对。我是这样考虑的，你看对不对啊。

首先，你在储蓄账户内的利息是日累计的，10000的利息应该会比你算的500高。其次，这个plan整个就是在打时间差，你在储蓄账户里的钱并不只是你的存款, 而是你的家庭收入，在你没付帐单之前，你就在收利息，而且从它网站来看，这等于直接减少本金（传统意义），时间差也是省利息的。但传统的房贷没有这个便利。如果家庭收入高，费用高的家庭很适用呢。规划好支付费用的时间，风险并不大，就是得算清利和弊，弊就是那。75的差异，还有这个借款利息有固定利息吗？anyway 谢谢小宝妈提供的这个信息。

Could you submit your caculation?

 

[Timothy's]

Another 弊 is, you may want to consolidate all your bank accounts to this account as every dollar counts, but it's really inconvenient as it doesn't have too many ATMs for you to withdraw cash, and it has monthly transaction fee which seems not waived..

But, you may pay out mortgage much sooner than the traditional one.. you don't have the maximum cap for the lump sum payments.. actually you are paying lump sum every pay day..

My coworker still keep his regular bank acount just for cash.
OR you can open a bank acount for you kid, keep small amount of money there for cash. Kid acount has no service charge.

Most of closed variable mortage allow you increase 1/6th or monthly payment and pay 1/6th lump sum each year. I believe it is enough for most people. For people with very high income want o pay of mortage fast. There are open variable mortage, you can pay it off any time.

 

[dalong]

10000一年的利息是512(日累计的话），但这10000直接抵扣本金的话，你还得算机会成本，和传统房贷来比。那看你什么时间取了。

你的传统房贷是你每月得从收入抵扣费用后省出钱来付出去，但这个办法是，你的收入在付费用之前就可以抵本金一段时间，因为是影响本金，在房贷的初期，大多数都是利息，所以高收入的家庭的机会成本会很高的。这种方法相对省钱。

Could you submit your caculation?

 

[Timothy's]

Usually comparison is done between Manulife one (prime rate) and variable rate mortgage (prime -0.75) plus home equity line of credit (at prime rate).
Manulife one is foolproof. It is easy to manage, don’t need any planning, as long as you spend less than you earn. You will keep saving.
You can combine an open variable mortgage with a home equity line of credit; it basically does the same thing. But because the mortgage interest is lower, you can save more. This arrangement does take more management, you have to pay the mortgage as much as possible, and use line of credit as less as possible only to cover an emergency.
For both method the major saving come from virtually eliminated your low interest checking and saving account, let money go against mortgage.

Both methods are risky to people without discipline. You may spend all your home equity without even know it.

Manulife one is especially good for people are self employed or have home business. Because your income coming as lump sum payment and you may have income in some month and don’t have income at other time. You can pay it when you get your money and don’t need to pay it when you don’t have income. No like tradition mortgage you have to pay every month no matter what happened. At lean time you can borrow money from the account at much lower interest than credit card.

 

[小傻]

Very good point!

Only one question, I think "prime - 0.75%" (or maybe prime -1%) is for closed variable rate.

What's the best open variable rate on the market recently. That's the one you should compare with...

Usually comparison is done between Manulife one (prime rate) and variable rate mortgage (prime -0.75) plus home equity line of credit (at prime rate).
Manulife one is foolproof. It is easy to manage, don’t need any planning, as long as you spend less than you earn. You will keep saving.
You can combine an open variable mortgage with a home equity line of credit; it basically does the same thing. But because the mortgage interest is lower, you can save more. This arrangement does take more management, you have to pay the mortgage as much as possible, and use line of credit as less as possible only to cover an emergency.
For both method the major saving come from virtually eliminated your low interest checking and saving account, let money go against mortgage.

Both methods are risky to people without discipline. You may spend all your home equity without even know it.

Manulife one is especially good for people are self employed or have home business. Because your income coming as lump sum payment and you may have income in some month and don’t have income at other time. You can pay it when you get your money and don’t need to pay it when you don’t have income. No like tradition mortgage you have to pay every month no matter what happened. At lean time you can borrow money from the account at much lower interest than credit card.

 

[Timothy's]

You get prime -1%. Where you get it? Could you share? I only get prime-0.8%.