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[OP]
Member
Dec 26, 2004
272 posts
7 upvotes
Mississauga

Manulife One account

Does anyone have this type of account? I read online but still a bit unclear how it works.
Just want to see if it's worth it to open one.
Thanks in advance.
10 replies
Deal Fanatic
Jul 1, 2007
8341 posts
1341 upvotes
It's really just a home equity line of credit with all the features of a checking account.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
Sep 12, 2008
88 posts
27 upvotes
Canada
Thalo is right, except that it can also act as a mortgage. Before you sign up, you are able to have mortgage, and LOC.
But you are also able to split a single loan between a certain proportion mortgage and a certain proportion LOC. I'm not a fanboi or anything, but I think that is unique.
I'm considering it for a condo mortgage. BTW, if you go through a broker for this purpose, watch out, as some brokers take a fee for it, and others don't. And it's a hefty fee.
Sr. Member
Jun 13, 2018
631 posts
464 upvotes
If you have multiple deposits per month from payroll, etc, it can really reduce your interest costs. Every deposit lowers the outstanding HELOC , and every bill payment or cash withdrawal increases it. Can work very well for the frugal.
Deal Addict
User avatar
Jan 2, 2012
3645 posts
1512 upvotes
Toronto
oratihsus wrote: Does anyone have this type of account? I read online but still a bit unclear how it works.
Just want to see if it's worth it to open one.
Thanks in advance.
The main good thing is that every single payment you get, goes immediately against the principal.

However there are many negatives about this type of account:
- check if interest rate is higher vs other kinds of mortgages/HELOCs. The advantage you get from more frequent payments, may be easily offset by a higher interest rate
- they charge a monthly fee of something like $17
- uses "The Exchange" network ATMs. Typically not as convenient as the big-5 bank ATMs
- this account is incredibly easy to abuse, as you can freely take out money against your home on a whim. You need to be meticulous in your budgeting and daily finances to ensure you're actually paying down your home and building equity

For most people with a regular job and regular paycheques, this account is probably not a good choice. I believe this account is designed more for those with sporadic, larger amounts of money coming in and would benefit from quicker paydown of the principal.
Deal Fanatic
Jul 1, 2007
8341 posts
1341 upvotes
Yeah, biggest downside is the monthly fee. It's a virtual bank (like Simplii) and you have a limited (though decent, getting better) ATM network, but no branches... so what are you paying for?

In terms of being like a HELOC, I can have a HELOC at my bank and do most of the same transactions on it as with a One account, for no monthly fee, just can't set up a pay deposit into it (as far as I know).

I should add: from what I've seen (from a co-worker who has a One account) the online banking is really really awful (like it was designed in the 1990s).
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
[OP]
Member
Dec 26, 2004
272 posts
7 upvotes
Mississauga
Thanks everyone for your answers. With the fees, now I'm hesitant...lol
[OP]
Member
Dec 26, 2004
272 posts
7 upvotes
Mississauga
rob444 wrote: The main good thing is that every single payment you get, goes immediately against the principal.

However there are many negatives about this type of account:
- check if interest rate is higher vs other kinds of mortgages/HELOCs. The advantage you get from more frequent payments, may be easily offset by a higher interest rate
- they charge a monthly fee of something like $17
- uses "The Exchange" network ATMs. Typically not as convenient as the big-5 bank ATMs
- this account is incredibly easy to abuse, as you can freely take out money against your home on a whim. You need to be meticulous in your budgeting and daily finances to ensure you're actually paying down your home and building equity

For most people with a regular job and regular paycheques, this account is probably not a good choice. I believe this account is designed more for those with sporadic, larger amounts of money coming in and would benefit from quicker paydown of the principal.
The payment against the capital is what got my interest.
But I'll need to check on the rate like you said. And the monthly fee is what made me hesitant now...
Deal Addict
User avatar
Jan 2, 2012
3645 posts
1512 upvotes
Toronto
oratihsus wrote: The payment against the capital is what got my interest.
But I'll need to check on the rate like you said. And the monthly fee is what made me hesitant now...
How many extra payments are you expecting to do over any given year? Remember in any regular mortgage, you also have pre-payment privileges to pay down the principal.
[OP]
Member
Dec 26, 2004
272 posts
7 upvotes
Mississauga
I don't know yet. Because I just finished paying off the car, I'm thinking whether to pay down debts or put towards kids resp...which we haven't started.
Deal Addict
User avatar
Jan 2, 2012
3645 posts
1512 upvotes
Toronto
oratihsus wrote: I don't know yet. Because I just finished paying off the car, I'm thinking whether to pay down debts or put towards kids resp...which we haven't started.
Practically guaranteed you'll get a better return on your money with an RESP incl the 20% government grant, vs paying down mortgage.

As for debts that really depends what interest rate you're paying. Any debt with higher interest rate than your mortgage (so usually all of them since mortgage rates are pretty low) should be paid off first before making any mortgage prepayments.

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