Comments on: Canadian Tire One-and-Only Account, Part II http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-122730 David Sat, 22 Mar 2008 19:45:39 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-122730 Curious George, See part one of this tale, or drop by Million Dollar Journey to see the content there! DAvid Curious George,
See part one of this tale, or drop by Million Dollar Journey to see the content there!

DAvid

]]> By: CuriousGeorge http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-118870 CuriousGeorge Wed, 05 Mar 2008 07:48:55 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-118870 I met with a M1 rep last week. She explained that you will save on interest costs (and thus pay off your loan faster) because interest is calculated based on the daily account balance and compounded monthly. Assuming you pay all your bills and make all your purchases using a credit card and postpone paying the credit card off until just before interest is charged, you will save on interest even though the M1 account is at prime rather than prime minus x compounded semi-annually (BMO Readiline for example). For the life of me I can't figure out if this makes sense or not. Has anyone considered this? Does it make sense. I met with a M1 rep last week. She explained that you will save on interest costs (and thus pay off your loan faster) because interest is calculated based on the daily account balance and compounded monthly. Assuming you pay all your bills and make all your purchases using a credit card and postpone paying the credit card off until just before interest is charged, you will save on interest even though the M1 account is at prime rather than prime minus x compounded semi-annually (BMO Readiline for example).

For the life of me I can’t figure out if this makes sense or not.

Has anyone considered this? Does it make sense.

]]> By: Bob http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-116162 Bob Fri, 22 Feb 2008 15:49:33 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-116162 Having your income deposited immediately to your borrowings is convenient and makes sense, but it really doesn't save you much money, if anything. When you use the ManulifeOne calculator to calculate your expenses it asks for number of days your income will remain in the account before it starts to go out for expenses, even if you left it intact for 21 days which is generous, $4000 in income would save you .66 cents per day x 21 days = $13.80 per month, so in this example you would save $13.80 per month but then of course you are paying a monthly fee of $14.00 per month so you save nothing. Do the math, it don't add up. The $14.00 monthly fee is simply a money grab by Manulife Bank, Canadian Tire does not have it. Having your income deposited immediately to your borrowings is convenient and makes sense, but it really doesn’t save you much money, if anything. When you use the ManulifeOne calculator to calculate your expenses it asks for number of days your income will remain in the account before it starts to go out for expenses, even if you left it intact for 21 days which is generous, $4000 in income would save you .66 cents per day x 21 days = $13.80 per month, so in this example you would save $13.80 per month but then of course you are paying a monthly fee of $14.00 per month so you save nothing. Do the math, it don’t add up. The $14.00 monthly fee is simply a money grab by Manulife Bank, Canadian Tire does not have it.

]]> By: Reader Question on Manulife One Account http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-110625 Reader Question on Manulife One Account Wed, 06 Feb 2008 03:11:24 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-110625 [...] a combined account offers one advantage that I discussed in an earlier post: the mortgage is open and you can pay it off in full or part at anytime. However, conventional [...] [...] a combined account offers one advantage that I discussed in an earlier post: the mortgage is open and you can pay it off in full or part at anytime. However, conventional [...]

]]> By: Online Mortgage Broker http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-68234 Online Mortgage Broker Tue, 25 Sep 2007 03:50:07 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-68234 Canadian Tire has a solid product, but at a high rate of interest. For this reason, Million Dollar Journey suggests a good alternative in BMO's Readiline product--especially if you want a variable rate. If you need the security of a fixed, check out the Matrix by FirstLine (a division of CIBC). It's rate and features are both excellent. - Melanie P.S. Few borrowers use their pre-payment privileges to any great extent. Keep that in mind when gauging the attractiveness of an open mortgage/line of credit at prime rate. Canadian Tire has a solid product, but at a high rate of interest. For this reason, Million Dollar Journey suggests a good alternative in BMO’s Readiline product–especially if you want a variable rate. If you need the security of a fixed, check out the Matrix by FirstLine (a division of CIBC). It’s rate and features are both excellent. – Melanie

P.S. Few borrowers use their pre-payment privileges to any great extent. Keep that in mind when gauging the attractiveness of an open mortgage/line of credit at prime rate.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-67505 Canadian Capitalist Thu, 20 Sep 2007 15:05:50 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-67505 Jeff: We obtained our first mortgage about 5 years back. In hind sight, we would have saved a lot of money in interest payments by opting for a variable-rate mortgage. But back then, so many people were losing their jobs in the tech sector and with two jobs in the same sector, we chose to opt for the "sleep at night" factor instead of the savings. Today, with different financial circumstances we may make a different choice but in that context, that's the choice we made. Jeff: We obtained our first mortgage about 5 years back. In hind sight, we would have saved a lot of money in interest payments by opting for a variable-rate mortgage. But back then, so many people were losing their jobs in the tech sector and with two jobs in the same sector, we chose to opt for the “sleep at night” factor instead of the savings.

Today, with different financial circumstances we may make a different choice but in that context, that’s the choice we made.

]]> By: Jeff H http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-67415 Jeff H Thu, 20 Sep 2007 00:41:33 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-67415 I'm curious about your choice of a 5yr fixed-rate mortgate. I recently read Margot Bai's book Spend Smarter, Save Bigger, which I believe you reviewed earlier this year. In it, she makes the case in the aggregate we are better off taking a series of 1yr variable mortgages, because the premium we pay to get a fixed rate ends up being more expensive than the risk attached to the cheapest available variable 1yr. According to Margot, historical studies prove out this approach. Would you agree with this approach? Why the choice of a fixed rate mortgage? Thanks, jeff I’m curious about your choice of a 5yr fixed-rate mortgate. I recently read Margot Bai’s book Spend Smarter, Save Bigger, which I believe you reviewed earlier this year. In it, she makes the case in the aggregate we are better off taking a series of 1yr variable mortgages, because the premium we pay to get a fixed rate ends up being more expensive than the risk attached to the cheapest available variable 1yr. According to Margot, historical studies prove out this approach. Would you agree with this approach? Why the choice of a fixed rate mortgage? Thanks,
jeff

]]> By: Warren http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-66955 Warren Sun, 16 Sep 2007 20:39:34 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-66955 Hey Phil I had the same charges with an ING mortgage I recently retired, I believe the terms were much like the 20/20 you describe. It worked for me as well, took me 7.5 years to pay of a mortgage that was originally 5% down, 25 year term. Oh ya, then there's a 60-90 day wait for the papers... if only I had a 60-90 day window to make payments. :) Hey Phil I had the same charges with an ING mortgage I recently retired, I believe the terms were much like the 20/20 you describe. It worked for me as well, took me 7.5 years to pay of a mortgage that was originally 5% down, 25 year term.

Oh ya, then there’s a 60-90 day wait for the papers… if only I had a 60-90 day window to make payments. :)

]]> By: Phil S http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-66621 Phil S Thu, 13 Sep 2007 23:26:13 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-66621 I had BMO's 20/20 mortgage, which is the one where you have an option of a 20% downpayment AND a 20% increase in your payments in order to pay off your mortgage quicker. I knocked out my mortgage in just over 3 years using BMO's 20/20 plan. I still got dinged a few hundred dollars at the end of my mortgage in order to close it out. What the heck is up with that? That pissed me off more than anything else... It was roughly a $300 dispensing fee to retire a mortgage? And that was after they had all of their money back! Gaak! If the Manulife or Canadian Tire plans don't stick you with that ridiculous fee, then I would consider using them over the traditional banks. I had BMO’s 20/20 mortgage, which is the one where you have an option of a 20% downpayment AND a 20% increase in your payments in order to pay off your mortgage quicker.

I knocked out my mortgage in just over 3 years using BMO’s 20/20 plan. I still got dinged a few hundred dollars at the end of my mortgage in order to close it out. What the heck is up with that? That pissed me off more than anything else… It was roughly a $300 dispensing fee to retire a mortgage? And that was after they had all of their money back! Gaak!

If the Manulife or Canadian Tire plans don’t stick you with that ridiculous fee, then I would consider using them over the traditional banks.

]]> By: Dan http://www.canadiancapitalist.com/canadian-tire-one-and-only-account-part-ii/#comment-66615 Dan Thu, 13 Sep 2007 21:59:54 +0000 http://www.canadiancapitalist.com/2007/09/12/canadian-tire-one-and-only-account-part-ii#comment-66615 I want to know if you get Canadian Tire money back everytime you make a payment, that would be cool. ;) I want to know if you get Canadian Tire money back everytime you make a payment, that would be cool. ;)

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