The following question is from Tony, the blogger behind Pharma Daddy:

I’ve been looking into the Manulife ONE concept over the last little while and it really intrigues me as we are very responsible spenders and savers and think that we could certainly accelerate paying off our loans with this sort of account. What do you know and/or think of this type of account?

Thank you for your question Tony. In this post, we’ll take a good hard look at this innovative product from Manulife Bank.

What is Manulife One?

A Manulife One account combines all your checking, savings and borrowing accounts into one big pot. Since financial institutions typically charge more in interest on loans than they pay on deposits, combining everything into one account should, at least in theory, help you save on interest costs.

What are the benefits of Manulife One?

If you have chequing, savings and loan accounts all over the place, chances are you will benefit from the mere act of consolidating all your accounts in one place. Any deposit to the account automatically reduces the balance owing on a loan, so you’ll benefit from lower interest payments. Since the Manulife One account is secured by your residence, you will also be able to borrow at a much lower rate than credit cards and personal lines of credit. A Manulife One account can be an excellent cash management tool for anyone with irregular income streams.

What are the drawbacks of Manulife One?

The chief disadvantage of a Manulife One account are extra costs that are imposed in two ways. First, the Manulife One account charges interest at what the bank calls a “Base Rate”. Unlike, traditional secured lines of credit, which charge interest based on the Prime Rate (Prime plus 0.5 percent, for example), the Base Rate is not always in sync with the Prime Rate. For example, when the Bank of Canada cuts interest rates, traditional banks, with rare exceptions, immediately cut their Prime Rate. Manulife, on the other hand, has in the past, been slow to reduce the “Base Rate” promptly. These delays impose extra interest costs to account holders.

The second cost Manulife One imposes is the monthly fee, which is currently set at $14 per month. That’s roughly the cost of the highest tier chequing accounts at traditional banks. But the premium bank chequing accounts often come with extra benefits like free money orders, annual fee waivers on premium credit cards, discounts on safe deposit box rentals etc. that Manulife One doesn’t currently offer. If you consolidate all your accounts at a traditional bank, you can get all the advantages of an all-in-one account plus the convenience of moving funds to and from your investment account.

Also, it is worth noting that you may not always get the best fixed rate at Manulife. As of this writing, the 1-year closed fixed rate at Manulife is 3.0 percent compared to 2.8 percent offered by many mortgage brokers but the 5-year closed fixed rate that Manulife offers is competitive with the best rates available. The moral is that you should shop around for your fixed rate mortgage.

What are my alternatives

National Bank Financial offers an identical product called All-in-One Banking that does not have a monthly fee on the main account and links the interest rate to Prime. The interest rate is currently Prime plus 1 percent but one understands that the rate is negotiable.

An even better alternative may simply be a consolidation at a traditional bank combined with a line of credit secured against the home. It offers all the advantages of a Manulife One account without the drawbacks albeit with some effort involved in moving around funds every once in a while.

Additional Resources

Manulife One Customer reports on

Manulife One Mortgage Review by Million Dollar Journey blog.

Manulife One services and fees

Manulife One Savings Calculator

Please note that this is my opinion only and it’s possible that a combined account fits your financial situation perfectly. As always, do your own due diligence.

This article has 74 comments

  1. Thanks for the mention CC. I agree with your assessment. The high rate on the M1 account makes it undesirable. It would be cheaper to get a readvancable mortgage with an open variable installment portion like what BMO offers.

  2. I am on a variable -.90 closed right now and have been looking into Manulife before and now Canadian Tire One-and-Only as we plan on buying new home soon and selling the condo. Here are my thoughts:

    1. I have been able to pay down a lot of the current condo with 15% lump sum prepayments each year and also increase payments by 15% each year.

    2. Variable -.90 was a great rate but harder to get now if at all. This is a closed mortgage.

    3. If I was to to it again with the condo, I would probably get the RBC prime -.85 variable OPEN as you can pay it off at any time.

    4. When we do get a house, we will go with the One and Only CDN Tire acct? Why? Well we could have an open and a HELOC and achieve similar results but… we are good savers and I want all my money working for me. EVERY dollar you save in the acct goes directly to your mortgage and then you also open up more line of credit. People saving for a rainy day, do not need to with this account. All your rainy day money should be in this account. EVERY dollar of NON-RRSP money should be in this account to use it properly. One day it is at zero, then turns into a high savings account.

    5. I like the idea of 1 bank account like this but you must be a great saver. If not, you will abuse the line of credit and the balance could be more negative than it started.

    So basically there is pluses and minuses for everyone. I look forward to it as I think it will serve us with with OUR LIFESTYLE. Rockstars need not apply 😉

    BTW, we also signed up for a CDN Tire Savings acct until we buy a new home. It is still 3 months at 5.5% which is great!

  3. Canadian Capitalist

    Brock: Thanks for your comments. Different strokes for different folks, eh? I noticed in the ManuOne page that Prof. Milevsky is enthusiastic about these accounts because they offer the benefit of consolidation.

  4. dayLateDollarShort


    I just got a M1 account two months ago for the same reason that Brock explained. Including the fact that we just built a new house. I chose it because it was very open and if/when I leave it it will cost only $100 dollar discharge fee (assuming that I do not lock in a portion). If interest rates go down (as it looks like it might) in the next year, I may leave or even lock in if they go below 5%

    The general opinion on MDJ and other blogs is that one can “do better” with a discounted prime account.
    My question is: What other accounts should I be looking at that are as flexible as the M1 that also discounts prime?
    Or am I just paying a premium for this flexibility?

    Another part of the reason that I chose an All-In-One account is my style of home budgeting. One key principal is that this month’s money is allocated for next month. So in effect I keep two month’s salary available at all times. Because I run 95% percent of our purchases through our cash back CC, the balance is around 10k.
    When I add in other short term savings (Holiday, vacations), it can go between 15 and 20,000.

    So after a year of this style of budgeting, I started to realize that I could be putting this money to better use. I still “allocate” extra to the mortgage but it was the extra 15k of liquid cash that I wanted deal with.

    Thanks. Great site.

  5. Obviously there isn’t one right answer for everyone but it seems to me that the only way you can benefit from the open qualities of the M1 or CT mortgage is if you can prepay significantly more (not just more) than the allowed amounts for a normal mortgage.

    Most mortgages allow you to prepay 20% of the original value of the loan which is way more than most people can pay down so they don’t benefit at all from the ability to put down more than 20%.

  6. Hi!

    Why not combining a regular mortgage (fixed or variable) for the bulk of the money with a CT or M1 for the rest? This way, you’ll get the advantage of money working for you all the time in M1, while getting the best rate for the bulk of the sum. Is it possible, or it’s just a dream?

  7. From what I can see the CT account is equal to M1 without the monthly fee. Manulife Bank greatly exagerates its claim that this account will save you money by using their mortgage calculator. When using the calculator people will always undersestimate what they spend on a monthly basis or they will be guided by the banking consultant to provide a lower number which of course leaves more money available to reduce the debt. What is nice about these accounts is what you don’t spend every month reduces your borrowing, but you have to have something left every month for this to happen. Another flaw in the mortgage calculator is that it will use any cash balances to reduce debt, even though that money might be earmarked for spending down the road, so the calculation assumes that that money will not be coming out. So, be very careful when you are using the calculator, it is smoke and mirrors.

  8. People are a little stuck on spreadsheets here and are forgetting what this financial product is really about. Simplification – this is a lifestyle mortgage.
    I’m looking forward to getting M1 account for several reasons, one of which is I want to simplify my debt and having to deal with less people/phone calls/institutions/crapy reward programs/mail/higher interest crCards …, fact is there is a glut of crappy debt out there and people have to deal with it.
    I have a new home with lots of little and big projects , a young daughter, a very busy job, a business as well, I’m looking do more business but need more money, my loving wife helps me whenever she can, … so I am busy living, and if I can cut out that part of my life that I see little value in
    (expensive debt) and deal less with that and free up more of my time for something valuable, then I’d love to see it gone. So the bonus is I have consolidated my debt, simplified my bill payments, have less distractions, have easy access to my home’s equity and I’ll more time for me and family.
    Sounds good to me, I’m waiting for the next wave of lifestyle debt and investment products to come out.

  9. The M1 product is good, but I’ve discovered that National Bank offeres a superior All-in-one product. It provides the same benefits as the M1, but without the fees.

  10. Just a word to anyone considering a Manulife One Account… DON’T DO IT! I have one and can’t wait to get out of it. Their fees and other problems are bad enough, but they recently changed the rate making it much more expensive than the competition.

    Anyone considering the M1 account should read the thread at
    I am a new M1 customer and I am very upset and disappointed with the product and service. Don’t say we didn’t warn you!

  12. There is another alternative to manulifeone. And that is all in on with National bank of Canada.

  13. oops I meant “all in one”

  14. I like the M1 account, in times like these – Manulife is the biggest financial company in canada with a better rating than the banks. These all-in-ones are getting big in the states andare hug in Australia I hear. I pay $12/mo. for a TD checking account, I’m fine with he $14/mo. M1 charge. Either way, the all-in-one banking is the way to go. Why leave money sitting in a checking account that does nothing for me when it can be reducing my daily interest charges. Its a spend up vs. a spend down principle that I think is so valuable. The rate becomes the secondary issue, the primary issue is the way you are USING your money. Is your money working for you or the bank?

  15. If YOU are paying a higher interest rate to Manulife for your M1 than you would to the bank for your mortgage, then YOUR money is definitely working for Manulife. The suggestion that flowing your paycheque through M1 offering any real benefit has been thoroughly debunked at Million Dollar Journey, Fat Wallet, and the Mortgage Professor as well as other places.

    The Australian Government has had a lot to say about these mortgages — none of it good, and I believe have severely regulated them.


  16. Sure, if I am paying a bit higher rate to M1 then they are getting that, however, over the course of the year my total interest paid is going to be less than a traditional mortgage. I am hoping to buy a home in the next couple of years with my 20% down and a traditional mortgage doesn’t even compare to the all-in-one format. I’d like to be debt free asap and the traditional mortgage will be paid off in 25 years, the all-in-ones work faster if you are disciplined and can budget. Its pretty simple in my mind!

  17. A traditional mortgage in fact compares very well. I paid my 25 year 5% down mortgage off in less that 5 years using a traditional mortgage, at far less cost than Manulife would have been. I was fortunate to obtain a low fixed rate, and made additional payments as I had extra cash. While my rate remained below 5%, Manulife’s climbed to over 6.5%.

    Manulife is only ‘cheaper’ if you choose to make extra payments to M1, but not to a traditional mortgage. In that case you are not making a valid comparison.

    You can pay any mortgage off just about as fast as you want, if you choose to. IF you have a desire to pay your mortgage off quickly, WHY would you choose a 25 year amortization? You could choose 20, or 16, or 10 years rather than 25.

    Also, don’t forget that those who chose a traditional variable rate mortgage from the big 5 last year are laughing all the way to the bank as they pay 1.5% interest rates just now.


  18. I’m with you on last years rates from the banks, I’d love a 1.5% but I’m still 2 yrs away from purchase. I’d probably pick a 20 yr amort. and I like how M1 uses all of my money each day to keep my daily balance lower. Its automatic for me, with a traditional mort. I have to consciously make additional payments. With M1 its doing it for me all the time. If I’m making minimum payments on M1 then I agree, its not cheaper. I want every penny against my debt each day of the month to reduce interest expense.

    Depending on your goals…

  19. I really enjoy my M1 account. I was recently severeanced off from my work and was able to put the total severance down on my debt saving additional interest on what I have left on my morgage. As I return to school to seek out my new career the M1 plays perfectly to my needs. I will soon be locking in a fixed sub-account at which 75 % of the debt will be like a fixed morgage for 5 years at 3.9 %. Interest rates will go back up, and when I am finished school and back working my M1 account will be there to finally pay off and become debt free.

  20. Interesting article, and great comments everyone.

    Looking at the Canadian Tire One and Only for my next mortgage. The biggest attraction for me, and one I don’t seem to see mentioned anywhere… is it gives you flexability that you just can’t get in a traditional mortgage. I’m self employed, and doing alright… have a decent lump sum I’d like to put towards my mortgage. However… there’s always the ‘what if’ (especially in small business).

    If you apply all of your savings towards a traditional mortgage, and suddenly you’ve got a lean month… you’re stuck with what you’ve got in your pockets (or end up having to use other credit options, credit cards, etc). And on the flip side… if a really lucrative investment opportunity were to come up, once again you wouldn’t have that cash available to take advantage.

    This flexability is actually one of the biggest reasons I’m drawn to this product.

  21. My husband and I joined manulife one three and half years ago. We swear by this great product. Yes the service fee of $14 is steep however, the amount of interest saved gives you more value then anything. I’m 32 and debt free!!! No traditional mortgage could do that!!!

  22. this product is great! look at how much fees you would pay at any other bank when you combine the fees for all your different accounts and are limited with the number of transactions you make- $14 is nothing! this product is only meant for people who are responsible with their money, who make a financial plan and stick to (also planning ahead for rainy days) now a days banks suck to deal with whether its your chq going on hold, having to worry about making minimum payments on credit cards, or if youre getting paid tomorrow and need cash now- why would you have 10,000 in savings account when your paying sooo much more in interest if you had a traditional mtg? honestly do the mtg calculator and really see what works for you- if you dont believe it look up a Manulife consultant- how could it hurt? people who dont get the concept dont like- and if another bank offers an interest rate of -.25 less than manulife- who cares?? think about how much money you save paying off your mtg in 5 years rather than 25 years, just by having this account and not putting more lump sum payments!

  23. I’m thinking of getting involved in manulife1. I don’t have a mortgage or any real debt. My advisor thought it would be a great way to make sure I always have access to money based on the value of my house. Any thoughts?

  24. Pro Man1
    Two words; Simplicity and flexibility.
    Just spend less than you bring in.
    The benefit is there.

  25. I had a heloc at td plus two personal bank accounts at td as well as a business account. Three credit cards . My wife also has a credit card. We were partially on trac with our td l.o.c. we had no mortgage. We were carrying balances every month on our credit cards even though we knew better.
    We now have a manulife all in one account with the manulife dredit card. – no td loc. anymore – interest rate is 3.25% the same as it was for td. We closed one td bank account saving overdraft interest and bank fees and dont use the overdraft in the other td account now. Our all in one is our main account. Most of our money goes there. I closed one of my credit cards. I am self employed. My other two two original credit cards are for my business use. We are conscious of seeing our all in one balance at 3.25% reduce while avoiding other higher interest. I wasnt sure if we could benefit that much by changing to all in one seeing as we allready had a heloc. We are very pleased with our manulife account. Iam enjoying seeing it paid down. I know we are doing the right thing for us as long as we avoid higher interest. The mindset around the all in one account recognizes a healthy approach to money management if followed. We have used the smyth maneover in part when we originally converted our mortgage to our old td L.O.C. Iam working to stay out of my business overdraft now as it is the only place we pay more than 3.25% interest. My business bank account chrges me 24% on my overdraft. For me setting up a good system works best. I can act as my own bank at a low interest rate. Things are looking good. I see paying down our all in one and buying a small shop to rent out which will increase income and cash flow. It will also further diversify our other investments. I have the desire and focus to reduce debt and grow assets and the all in one account fits nicely.

  26. Could M1’s concept not work with a bank LOC? If I were to apply my paycheck to the LOC and then transfer enough money back to a chequing account to pay monthly expenses, would my money not be working for me the same way? Paying off my mortgage in under 5 years just sounds too good to be true.

  27. DD.. I agree. I am not sure how a regular secured LOC would be any different. As mentioned previously, I guess this assumes there are no big ticket purchases or unforeseen expenses taken into consideration in the calculations. I get the concept of every dollar you have coming in pays down the debt. One day your pay comes and pays the debt, the next it comes out to pay bills, buy food, gas, etc….. Definitely (mentioned before as well) designed for those who are disciplined and make sure that they spend less than comes in…

    Once again, how are these products different than traditional secured lines of credit? They at least have no fees that I am aware of on a monthly basis?

    I think I must be missing something…

  28. The one thing that needs to be highlighted when comparing the M1 account to a mortgage is the fact that mortgage interest is compounded semi-annually and is not simple interest calculated daily such as the Manulife One account. Therefore the rate is secondary to the fact that the M1 account allows one to pay down the principle first with every deposit and no transfers are required from another account as would be the case with a HELOC. No mortgage gives the client control over the repayment of the borrowed amount, but the Manulife One account does provide each account holder with the ability to manage cash flow according to his or her own needs and circumstance. To me one thing makes some sense here. The Big Banks make billions by keeping people in debt, but Manulife Financial benefits more when people don’t have debt which must be why they introduced something so radically different from what the other banks offer. As for the National Bank, well, watch out for those banks who say they give something for free. If you open their account and leave within 5 years, they charge back the legal fees, appraisal fees, etc., and they often force clients to convert part of the debt to a locked-in mortgage (subject to penalties if a client closes the account) whereas Manulife Bank does not. As a Manulife One account holder, I can speak to the success we have had with it and it has outperformed any mortgage we have ever had.

  29. BEWARE Manulife new inflated discharge fees!!! Just a note that when you decide to terminate your Manulife ONE account there is a $250 discharge fee as opposed to the previous $100 fee. Apparently they notified us in June about the August increase but I was totally unaware! They say it is to be more inline with other banks (I checked RBC and CIBC both charge $200 not $250). So I guess they are still looking at ways to stick it to you one more time just when you think you felt great about their product. Hmmm….

  30. Hi,

    I am a real estate agent in Ottawa and there is a lot of talk in my office about interest rates this year. I am buying a home and moving in 3 weeks, have to make a mortgage decision soon/

    Here is my situation. Need to get 268k mortgage. Want to do SM

    In december 2010, I got pre-approved for President choice 5 year fixed at 3.52% the rates when up across board.

    Option 1. Go with PC at 3.52% and get Manulife1 in second position at prime+0.50%. Manulife said they will let me to increase the LOC once anually, by the pre-payment please note pre-payment and not premiums.
    The PC has 20% prepayment, anytime, any amount per year. No revolving LOC with PC, only normal loc.

    Option 2: Another Bank offered me prime-0.90% or fixed 5 year for 3.89% prepayment 20% any amount, anytime and I can double up each payment. Get revolving line of credit at prime+0.50%
    Get a mixture of variable and fixed…but who knows by how much the rates will go up from now until 5 years is out……

    Option 3: Another bank offered prime-0.90% and/or fixed 5 for 3.69% but the pre-payment is only 10% and only one lump sum in a year, plus double up the payment option…
    The difference between 3.52% and 3.69% is around $2,000 in extra interest over the 5 year term.

    Option 3: get just the variable for 268k with revolving line of credit

    Option 4: get just the fixed at another bank for 268k with revolving line of credit. Painful since I have to swallow extra 2,000 in interest. Difference between 3.52% and 3.69% and between 3.69%
    and 3.89% additional 2500 in interest…..

    Any input appreciated what is the best thing to do?
    Thanks Tom

  31. Just to respond to Justin’s comment. CIBC charges the same discharge fee of $250.00

  32. We are currently in our second year of a fixed 5 year at 3.9% with 20% prepayment per year and are not sure what to do with the M1. We have heard so many mixed reviews although most of them back in 2008/2009. Our 2010 year is up in at the end of April and we start year 3 with a current discharge fee of aprox $2300. We spoke to M1 and they could put us in the second position pay the 20% for 2010 and then again in April another 20% for 2011 then discharge to make the fees cheaper or ride it out in second position until our 5 year term is up. With M1 we supposedly could pay our mortgage in aprox 4 years. We are in our early 30’s and really want to burn this mortgage up so we can invest in other real estate etc. With our current mortgage it would take 21 years to pay off accelerated weekly. The remainder of our mortgage is $170,00 and we have over 95,000 cash, and can save 1300 a month, confused, any advice would be great.

  33. Carrie, you don’t indicate the financial institution holding your mortgage, so a more complete reply is not possible, however, even without M1 you can considerably reduce your mortgage. Go to your lender RIGHT AWAY, and pay some of the $95,000 you have in cash to reduce your principal. You can pay up to 20% of your original borrowings each year, so you can pay over $17,000 right now. On the anniversary date pay another 20%. Your mortgage should then be at half it’s original amount. In addition, check if you can double-up your weekly payments, further reducing your principal.

    Once your mortgage term is up, renegotiate for the lowest interest rate you can find with a financial institution which will allow both prepayments and double-up payments. Set your payments to be a bit more than half the maximum you could afford, then make every payment a double-up. If you are a bit tight some months (January?), you can skip a double-up, and still be largely on track.

    Remember, your current financial institution will allow you to pay your mortgage off in less than 5 years simply by paying down the 20% each year! M1 in this instance has no value to you, as you do not need to take a loan when you have sufficient cash on hand to meet your prepayment obligations. Why get an M1, borrow $20,000 to pay down your mortgage, then transfer $20,000 from your savings to M1 to pay out the loan?


  34. Carrie – If I can just add to David’s sound advice, if you aim to pay your Mortgage off in 4 years, then one option is to ride out your current mortgage and pay off 20% as soon as you can each year. The other side of this, however, is that if you switch to M1, you can drop $95000 into it right away cutting your mortgage in half. Then chip away at it until it is all paid off, which may be much quicker then you think (probably less than 4 years). And the way I see it, the faster you pay it off, then less you pay for your home. The benefit of M1 in this case is that your $95K of savings are still accessible to you in case of emergency whereas the 20% you pay against your mortgage is locked away in the equity of your home (although I suppose you could ask your lending institution for a secured line of credit to regain access to this money). You would have to do the calculation to see if this interest you save from immediately cutting $95000 off your mortgage is higher than the $2300 hit you take for getting out of your mortgage early. My wife and I (in our 30s) paid our house off using M1. We had savings similar to yours and were comforted by the fact that we could still acess them if needed without any fuss. With our house paid off, we are now rebuilding our nest egg, which is much easier when you don’t have monthly mortgage payments to make.

  35. I have a $60,000 mortgage fixed at 3.75%. $25,000 in cash (emergence fund) making 2% and no other debt. Is M1 something that will benefit me as a second. I’m looking to make my better use of my savings but still have it available if needed.


  36. There’s just one major point missing from this post: A mortgage is COMPOUND interest and the Manulife Home Line of Credit is simple interest. So, it’s worth is to take our your financial calculator and do the math. The LOC option reduces the amount of interest you pay every time you make a payment. Whereas, the compound interest environment (like a credit card) is pre-calculated and the interest is not reduced immediately IF you are allowed to make a payment against it that is not the anniversary date.

    Talk to a Manulife One EXPERT, and then go talk to your mortgage EXPERT and make an informed decision.
    “How much interest will I pay?” is the first question I would ask. 🙂

  37. @Nikki: Your comment is incorrect. Every time you pay extra on your mortgage, the interest portion of your payments goes down right away. The reason mortgages are compounded are because you are paying down the principal and the interest portion of every payment doesn’t quite equal the interest owed in anticipation of future paydown of principal. Of course, a LOC is simple interest. You are required to pay off the *entire* interest balance every month. If you don’t, your LOC interest is added to the principal and the next month you’ll be paying interest on the previous month’s interest balance as well. And guess what? That’s compound interest too.

  38. My wife and I have been using M1 for 4 years now, and while we value the flexibility and simplicity of it, we are questioning the higher interest rates @ M1, and noticing that the complete flexibility is probably allowing us to be less disciplined than we should be in paying our debt (and avoiding said high interest rates). We both have steady fixed incomes, and are looking for the best option to pay down some of our (substantial) debt. We are using income from a rental property to pay down our primary residence, and here are the #’s

    #1 M1 acct for our primary residence has a $200,000 balance at variable 3.5%. We’ve knocked it down $26K in the last 2 years.

    #2 M1 acct for a rental property, our borrowing maxed at $167,000 also at variable 3.5%.

    We’ve been considering Scotia’s home equity program or something similary. The other option would be to keep the M1s and lock up to 75% of debt at a lower fixed rate. Although we’ve been working with our financial advisor, who referred us to M1, we’d be interested in hearing your thoughts. Is it worth making any changes right now? Great site!

    Here’s my issue with the M1 (and I’m not 100% sure if it’s correct,,,):
    Since ALL your money goes to pay down your debt, what happens if you want to buy something (big or small)? It seems that you would be borrowing that money at 3.5%. Also, we currently have a portion of our paycheques diverted to an investment account. With an M1 account, wouldn’t that amount also be “borrowed” at 3.5%? A plus is that the interest would be tax deductible, but wouldn’t it be better to just buy it with money right off your paycheque vs. having all your money go to the M1, then “re-borrowing” it from your LOC?
    I’m wondering if it wouldn’t be a better idea to divert some income to a savings account (ING pays 2%) so that if you want to buy something you could use that money and not use money that you’d pay interest on.
    Oram I way off base? Is it so much better of a deal to have ALL your income pay down your debt, then borrow money for whatever on a LOC? I don’t know!

  40. Well, we’re getting a Manulife One account! The $14/m fee is nothing – endless debit use, bill payments included, cheques included. We’re disciplined, and this is perfect for us. We’re switching from a TD HELOC, which is .5% higher interest. Our paycheques will go straight in, bills paid automatically. It’s almost hands off. We’ll even set up our MBNA “Smart Cash” credit card to be paid in full automatically. It’s only used for fuel and food, because this card pays back 3% on those items!

  41. I have the National Bank All-in-One which is available through Investor’s Group. Currently it is at P+.5%.
    There are no fees and you can use National Bank ATM’s or Credit Union (for those folks in the Maritimes without a National Bank).

    I like it that it doesn’t have a monthly fee…..but like any of these products you need disipline….you tend to think you have more money than you do……

  42. On the fence here about the change to M1 with no mortgage and the interest rate….i presently own my home here and need cash flow…any ideas out there folks???

  43. If one is using the M1 as part of a financial plan, such as having more protection like disability insurance becasue of cash flow then M1 is great.

    For people who are self employed or people who could lose their jobs M1 beats all mortgages.

    Since most people only compare rates and don’t understand risk management the simple answer is go to the lowest rate, M1 is not for them.

    The question is like a job which is better…a job that pays say $95,000 per year full benefits, health/dental/ disabilty long and short term plus 10 days a year for sick days. Or a job that pays $105,000 with no benefits.

    With M1 one can take the higher paying job and get better benefits and be better protected, pay less taxes in retirement, have more money to spend in retirement… and have a real financial plan since cash flow is no longer a problem.

  44. Hello, I am trying to do some debt consolodation and an M1 was recommended to me. It is suggested that I pay interest only and take ( theoretically ) the money I save on mortgage interest and pay down the higher interest credit cards and lines of credit. The other option would be a regular mortgage ( includes the higher interest credit cards ) then a consolodation loan to pay the other amounts with the goal that in five years we will only have a mortgage and can then begin to pay that down quickly. We are not great savers. Do you think an M1 would be disastrous for us ?

  45. im also looking at the M1 because id like to access the equity in my home for some larger purchuses. Cant decide if it would be good for me or not, currently im at a fixed 4.39, so the manulife 3.5 would be better. i have a fair bit of equity in my home so it would be nice to be able to access it.

  46. OK, for the lay people out there who don’t understand all this – what is the long and the short of it?

  47. There is a 2.29 rate and u can get a secured line of credit at 3% prime right now. A house is not an atm. Get it paid off & retire is the plan.

  48. If you start with a bunch of debt, getting it all under one account would be a good idea. The best idea would be to pay it all off and operate from a cash position.

  49. Ok, well, we’ve had the M1 for several months now and it is a GOOD thing! We decided to put a hefty amount against what we owed with savings, since paying off a loan is better than trying to earn a smaller amount of interest and also paying tax on interest earned. Having this account sort of changes your perspective on investing. We created a fixed-term “SUB-ACCOUNT” in the M1 to pay off what is left on our house. It is locked in at 3.48% (if I remember correctly) for 5 years, since we anticipate rising rates. Nonetheless, that rate is astounding low historically speaking – why quibble about a possible small drop that “might” happen over next couple years. We appreciate the comfort of knowing the monthly, fixed amount going out to pay off the house over 5 years. We also followed through original plan having everything possible being paid automatically from the M1 account: utilities, taxes, tax refunds, etc. and also paid automatically monthly is our MBNA “SMARTCASH” Mastercards, which pays us 3% on groceries and gasoline, and 1% on anything else. (We have 2 separate SmartCash cards to utilize the $600 cap/person.) They send us a $50 cheque whenever that amount has been earned. We use the smartcash card like a debit card, and once again, it’s paid off automatically, monthly! One other thing; as we get older the easy access to the equity that has been built up in our house will be instantly available if a family emergency develops in the years to come. We haven’t researched the data, but this must surely be a better way to go for some people who might ever consider those wierd “CHIP” plans. All in all: the M1 is simply a joy!! Oh, yeah, that monthly summary is also top notch. (

  50. ps, forgot to include a link from Professor Milevsky talking about the inherent strategy of the M1:

  51. We looked at the M1 earlier and sat with a representative to go over everything however still have not made a decision. We are in our early 30’s and our current mortgage is left at around 160k with over 100k in cash in banks although we do want to renovate our kitchen and 2 bathrooms and finish the basement. I guess we are torn, do we get rid of the mortgage then renovate or get the M1.

  52. I am getting the M1 account. I am sick of paying $689.00 per week and only paying $12000.00 off my mortgage this year. I have a high mortgage but have 35% principal. We would like to finish our basement but cant afford it because the bank has it all. I have crunched the numbers and figure going this way, just paying what I am towards my mortgage, I will pay off an extra 10k. However, all of my money will be going against it. It’s a no brainer. Also, the flexablilty of finishing our basement and not having to go to credit cards or applying for a loan- just write a cheque-wow

  53. please HELP!
    We have 2 mortgages on 2 properties. The reason being, we invested in a REIT and use much of the mortgage money on that. Our mortgages renew in a couple of months. We were thinking of simplifying things and consolidating. We do not carry any other debt but we feel we are living month to month. Wife is home with 3 kids now so there are 5 of us living on my income. What is our best move here?

  54. We are considering M1. I asked about any monthly fees, and I was told that Manulife gets their ‘pay’ solely from the 3.5%… is this the case? Is there a monthly fee?

    Also, is this insured in anyway. Right now, if I die, the house is paid for through mortage insurance. What insurance is offered with M1?

  55. “Mortgage Insurance” is offered by Manulife, but it’s probably better to just get term insurance. The rates are probably better, but we didn’t really check into this thoroughly.

    There is a $14/month fee for the statement. It’s really just a token fee, because the monthly statement is worth it’s weight in gold, giving a comprehensive overview of your financial state of being. It’s been fun watching our bar graph decreasing the past few months – and it’s been dramatic! Should have done this years ago. Consolidating everything has been a reassuring thing, a wise thing to do, and actually fun. We have a simple snapshot of our finances given to us at the end of every month and it is good for planning and motivating wise spending.

    Having the paycheque hitting the debt immediately is profound and virtualy everthing is on automatic now – the credit card (that 3% “Cash Back” from MBNA), all bills, tax returns, etc.

    We still highly recommend Manulife One.

  56. The one crucial point that is not mentioned in the original article is that regular mortgages are skewed so that almost all of your original payments go towards the interest owed, not the principal of the mortgage.

    The payments on a Manulife One account go towards the principal all the time, and the interest rate is comparable to that offered on a mortgage.

    That’s why Manulife One saves people money.


  57. The other advantage of Manulife One is that the interest is calculated daily, so as soon as you make a payment, you are saving money.

    Traditional mortgages only adjust the interest payments periodically, so a mortgagee cannot get ahead.

    The original article also neglected to mention that little tidbit.


  58. Can you clarify this for me please. A person is using this account as a all in one product and they pay simple interest at 3.50% and a monthly fee of 14.00. Are they not withdrawing there own money from this account ? And they are paying 3.50% to use there own money. If someone who is well versed in this product can they respond.

  59. Hoping for some feedback from someone with no monetary gain (sales people). I have a high mortgage, 275k with TD, no LOC (had one but was having a hard time managing it so I added the balance to my existing mortgage). Interest rate at TD is 3.65%. (Paying $1600 a month inc taxes)At this rate it looks like it will take me 25 years to pay off. When i use the mortgage calc with M1, it tells me i can pay off in 7.6 years!
    I have no other debts (other than car payment which is financed through the company i bought the car with- for 7 years). According to M1- my car would be paid off (i am currently paying 3.99%), I net about 5k a month. I know I am doing something wrong as I don’t have savings!
    I am not the best in managing my money, my fear is that I would use the available equity frivolously.
    Any suggestions ?

  60. @ Need some help:

    Some simple numbers: if you hard a 0% loan for $275,000 you would need to pay $3015.35 every month for 7.6 years to pay it off. At 3.65%, you would of course pay more. An amortized mortgage for 7.5 years would be on the order of $3600 per month to service. Somehow in going through the calculator with Manulife, you indicated you have $2000 per month of unspent money. Since your personal experience is that you aren’t saving such sums, then you need to look more closely at the numbers you put into the calculator.

    You are currently living on about $3000 per month in disposable income. To meet the timeline of the M1, you would have to trim that expenditure to about $1300 per month, as the rest ($3600) would be needed to meet your mortgage targets.

    Since your experience with your previous LOC was not positive, you might be wise to keep that experience in mind as you plan your mortgage pay down.


  61. I have a M1 account, just wondering if it would be wise to have a seperate spending account to pay monthly expenses? The reason I am asking is I feel like we are paying way to much in interest fees a month, I mean we have to pay car payment, utilities, groceries, insurance, etc…so of I am being charged 3.5 interest on my daily spending how is that benifiting me, not to mention that property taxes are not included in your M1. Any thoughts????

  62. I have used Manu One for 12 years and paid off my mortgage very quickly but I was disciplined as I was also about to retire in the 2 years after. Interest rates on conventional mortgage rates were also considerably higher then. No one has mentioned that fact that Manu One’s interest is calculated daily. The idea is to use your ManuOne credit card for monthly purchases and pay it off at the end of the month when your paycheck goes in. Money out/money in; hence the balance owing (and the interest) stays lower. You do have to be disciplined and any “want” item is balanced against paying for another brick in your home. Helps to visualize it that way. I kept my account even after my house was paid for and used it again to purchase a summer cottage–no sproblem –which also will be paid off in short order–same interest rate as on a principal residence. Would I have been able to do this with a conventional mortgage–I don’t believe so. The posted interest rate at a conventional bank may be lower for a mortgage but compare it vs.the ManuOne–remember the way it is calculated.

  63. To Lu (March 9, 2012) Check with your Manu One advisor who can run the numbers for you. You’re going to find that keeping all your banking needs in one account (ManuOne) makes more sense (and cents). Have all your utility and property taxes and car loans, etc. come out of your account towards or at the end of the month and use your ManuOne credit card for daily and weekly expenses (groceries, etc) and then pay it off at the end of the month.

  64. Hi,
    I would like to get more info. I lost my job and now feel that I need help to consolidate my debts.
    Thank you.

  65. esther healy,

    Unless you have 50% or more equity (in your house to all your debts) you will have to get a job first and apply to ManulifeOne later.


  66. Listen to my interview with Stuart Rodger of Manu Bank about ManuOne…

    It answers allot of the questions posted here.

    Cheers! Mark Huber, CFP

  67. Those who don’t like the Manulife One, simply just don’t understand how it works. Those who try to make a comparison between a traditional mortgage to the Manulife One is comparing apples to oranges. Those who say that the Manulife One rate is higher than a traditional LOC is incorrect because their current rate is as low as the RBC LOC who claims they have the lowest LOC rate (as of November 20, 2012). Then you have people who look at only rates and will say they can get a fixed or variable rate lower than the LOC rate. People who only look at rates are very singular in their thinking. Any Knowledgeable and Honest Mortgage Advisor and Financial Advisor will tell you that the right mortgage for every individual needs isn’t only based on rates. The original article also conveniently neglected to mention that bank rates are compounded rates and the rate charged by Manulife One is daily simple. The same principle behind compounded rates work great for your savings account, but it is terrible when it is applied to your mortgage. Daily simple is more cost effective for a mortgage. A monthly fee of $14 is nothing…don’t forget this is also a chequing account with unlimited transactions. Most people pay more than $14 to obtain unlimited transactions on their chequing account. At the end, it is true that Manulife One isn’t for everyone. If you are not disciplined with your finances and if you cannot comprehend or see your overall finances as a big picture, then the Manulife One isn’t for you. If you are disciplined, can see your overall finances as a big picture, willing to learn something new and want to sincerely pay your mortage down faster, than Manulife One is for you.

  68. I have a Manulife One account and am still learning how to use it effectively after a few years. Firstly, I was able to get rid of my $14 monthly few by using their credit card along with this account. I called Customer Service and asked for my fee to be waived. Anyone who calls will get this removed. We have found that we have to be disciplined with our money to stay on track. We pay for everything with our credit card instead of our bank account. The credit card is then paid at the end of the month. So far, this is working for us.

  69. This is the one thing I have a problem with this Manulife One. Debit cards transactions. So if I use my debit card to make purchases, say in place that don’t accept credit cards, I get dinged with interest because it is a debt? What about taking cash out for events and things where you cannot use credit cards. So now I am paying Manulife to take money out of my account. I just don’t understand this way of banking.

    • Sean, that is only looking at one side of the coin. you can’t forget that when your money isn’t being spent by you, that it has essentially reduced your principal on your mortgage. Then through the daily simple interest calculations you are saving on interest.
      If you look only at the single transaction, you will miss the big picture benefit.

  70. My question is this: if I am struggling to pay my mortgage and bills as they are, how am I to be able to amazingly have the money to pay and additional another 20%? It is obvious that a mortgage can be paid off quicker if you are able to put extra money towards it on a regular basis…The problem arises when the mortgage and monthly bills do not leave extra money…isn’t that the problem in the first place? What a I missing? I am presently on a floating mortgage through a Credit Union at 3.9% and have the amount we pay monthly at a manageable amount. Our mortgage is presently at over 133,000, and we have three children which will not be complete completed their secondary education for another 5 years, and plan on attending post secondary education as well. They are actively involved in sports – volleyball, soccer, basketball, etc. and that obviously takes up much of any ‘extra’ money at our disposal. If I had so much extra money at my disposal, why would I not have just increased my mortgage payments in the first place?

  71. …Please excuse the grammar/spelling mistakes…’have the money to pay an additional’; ‘what am I missing’;’will not be completed their secondary education’;’What am I missing’…

  72. I was able to secure a sweet variable rate back in the day (2008) at 1.75%. My equity reduced by 6,200 per year over the 5 year period. I switched to M1 at the end of the 5 year term. In the 2 years since I’ve been with M1, my principle has reduced by 6,800 per year. We have not made any changes to the way we spend or save over the last 7 years. Based on this, if I do not make any changes, I expect to pay off the house around 9 years. This is sweet compared to the 20+ years of the traditional mortgage.

    Now for the other side of the coin: The cost of M1 (as calculated by the amount I am paying as interest plus the bank fees) has nearly doubled. This is not a surprise since I do not pay the 1.75% anymore. But by my calculations, even with the increased costs, I am still going to be ahead by about $10-15k over the life of the mortgage assuming nothing else changes.

    What I try to do is to charge all my expenses to the credit card and pay off the balance at the end of each month through the M1 account. This ensures my principle keeps dropping with every deposit during the month thereby reducing interest.

    I tried to save up to make annual payments when in traditional mortgage but it takes a bit of discipline to do that. There is still discipline needed with M1, but the effort to do it is lower.

    Overall, I think M1 is working for me so far. If interest rates go up, there will probably be a “turning point” wherein the traditional mortgage becomes more cost effective.

  73. error correction: since I switched to M1, principle has reduce by about $13,000 per year and NOT the $6,800 I mentioned above.