What’s the secret to becoming mortgage-free sooner?
Use all of your money, every day to reduce your principal and save you interest – with Manulife One
Why do traditional mortgages take so long to pay off?
Traditional Mortgages
You get off to a slow start.
With a traditional mortgage, it’s not obvious how much interest you’re paying each month. In fact, when you first get a mortgage, half or more of your payment could be going to cover the interest rather than reducing your debt. Unless you make extra payments, your journey toward debt-freedom could get off to a very slow start.
Manulife One
You can start quickly.
Your monthly statement clearly shows the amount of interest you’ve paid and the change in your principal, so you’ll always know exactly where you stand. And, when you use the account for everyday banking, all of your money can be used to reduce your principal. This makes it easier to more quickly pay down your principal and reduce your interest cost.
You must obey the speed limit.
Traditional mortgages allow you to make extra payments, but they limit how often you can make prepayments and also how much you’re allowed to prepay. And, once you’ve made an extra payment you can’t get that money back – so you need to be pretty sure you won’t need that money for anything else.
No limits on principal pay-down.
With Manulife One you can pay down as much of your Main Account debt as you want, as frequently as you want – with no penalty. And – if your needs change, you can always get that money back, up to your borrowing limit.
Payments dont equal pay-down.
Mortgage payments represent a large monthly expense for most homeowners – and it’s easy to assume that those payments are making a large dent in your mortgage debt. Unfortunately, with traditional mortgages, your regular payments include both principal and interest portions. When you make a payment, only a portion of that payment is actually reducing your debt.
All deposits immediately reduce principal.
Every deposit you make to your Manulife One Main Account immediately reduces your principal by the full amount of the deposit. Interest is calculated daily and withdrawn from your account at the end of the month.
What’s the fastest way to pay down your mortgage?
To become mortgage-free sooner, there are two things you need to do – and Manulife One can help with both.
Strategy
Make extra payments more often.
When you make an extra payment, 100% of that payment goes toward reducing your principal. The more frequently you can make extra payments, the faster you’ll reduce your debt.
How Manulife One can help
Extra payments every single day.
When you use your Manulife One account for your everyday banking, every deposit you make immediately pays down your loan principal.
Increase the size of extra payments.
Since 100% of your extra payments go to reducing your principal, the larger the payment, the faster you’ll be
debt-free. It’s that simple.
Use ALL of your money to pay down your mortgage.
Because your Manulife One Main Account acts as your everyday chequing account, you can have your income automatically deposited into the account. Every time you get paid, the full amount of your pay is going to reduce your mortgage balance and save you interest. You pay your expenses out of the account but, as long as your income exceeds your expenses, all of your extra money is working to reduce your debt and save you interest.