6

I think it looks very interesting, and certainly promises to deliver. My main concern is, as a single person, is it wise to put all of my eggs into one basket?

3

To quote Andrew Carnegie "The wise man puts all his eggs in one basket and watches the basket."

While I'm not sure being single matters in this case, the One account is an interesting product.

For those not familiar with it; the account more-or-less combines your mortgage, savings and chequeing accounts into one.

The theory being that, even if you were to normally keep just a couple of thousand in a savings account, you are better off having it reduce your overall mortgage obligation for the months that you do not use the money, in order to save overall interest payment.

I have not used the product, but if you were disciplined in the use of the account, and depending on your own banking mix, it does seem like a good deal.

"All eggs" are not so much a worry in this case; almost the reverse. If you have too much money deposited with a single institution which fails, then government deposit insurance might not cover the whole amount.

Not a concern here (mostly) as you owe them, so absolute worst case if they fail someone else would end up holding the paper on your mortgage.

The biggest concern for me would be if someone were to treat this as a piggy-bank. It might well be so easy to spend from the one-big-account and the payments so seemingly low, that you might be tempted to never pay off the mortgage, leading to even more interest payments over the years - which is of course the opposite of the advertisements, but indeed what I suspect they are counting on.

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3

The main advantage to an all-in-one account is that it's just like a savings account where you earn guaranteed tax-free interest at a rate equal to your mortgage rate. There's no need to make lump-sum payments to pay down the mortgage faster, you just keep that money in the account (and don't touch it!).

Another major benefit for some people is that you can consolidate all your debts into a mortgage loan with lower interest rates. But those people who have consumer debt may not be good candidates, because as sdg pointed out, having access to all your home equity may be too tempting for some people.

The biggest drawbacks to Manulife One is the $14/month fee and the higher than average mortgage rates (Prime +1% variable). Of course if you already pay bank fees of $14 or more, this would just replace those.

Not sure what the alternatives are in the U.S., but Canadians can get a better all-in-one account with National Bank of Canada, who has no monthly fee unless you want sub-accounts (but rate is also Prime+1). Canadian Tire Financial used to also offer one of these accounts at Prime even, but it is no longer available.

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