One of the newest home financing products is the all-in-one mortgage. This innovative loan option combines several different types of accounts into one account and, as you will see, is advantageous for many people. We are the best resource for all in one mortgage rates in Canada. In addition to offering solid information on the pros and cons of these mortgages and other important information, we make it easy to find the best all-in-one mortgage interest rates. Read on to find out more about all-in-mortgages, and fill out our handy form if one of these mortgage products is right for you.
What is an All-in-One Mortgage?
An all-in-one mortgage is an innovative financial product that allows consumers to streamline their finances and save money on interest over the life of a mortgage loan. Essentially, all-in-one mortgages combine a mortgage and a personal banking account such as a savings account, a checking account, or both. Every time money is deposited into an all-in-one mortgage account, it goes toward the principal and interest on the mortgage loan. Because the principal is reduced, the amount of interest that must be paid each month goes down more quickly than in a traditional mortgage. The compounding schedule takes into account the current principal balance when it is time to add interest to the loan, so if the principal balance is continually being lowered, the amount of principal that the compounding schedule is attached to decreases as well. Therefore, less interest compounds over time.
At the same time, as money is withdrawn from an all-in-one mortgage account, the principal balance and interest payments go up. It works much the same as a home equity line of credit. When you withdraw money from an all-in-one mortgage account, you are essentially taking out a loan against your home’s equity, and this loan is subject to interest until you pay it off through your deposits.
The kinds of options that you have with an all-in-one mortgage vary from bank to bank. Some banks only allow you to combine a limited number of mortgage and cash flow accounts, while others allow you to combine many more. Usually, banks allow all-in-one mortgage accounts to include your primary residence but not your investment properties. All in one mortgage rates can be variable or fixed, just like the interest rates on traditional mortgage loans. Or, you might be able to get an all-in-one mortgage account that has a fixed rate on the mortgage and a variable rate on any advances and withdrawals. Some banks allow for as many as 100 different subdivisions of an all-in-one mortgage account so that you can create many different combinations of credit, savings, bill payment, and checking accounts. Ultimately, the possibilities for an all-in-one mortgage are limited only to what Canadian banks find comfortable and profitable.
Pros and Cons of All-in-One Mortgages
As you might have expected, all-in-one mortgages have many advantages and disadvantages. You should take the following things into consideration before you make the final decision to take out an all-in-one mortgage:
• Convenience — By combining your mortgage with several different kinds of accounts, you end up with only one account to track. This can be very convenient for busy people.
• Never Miss a Payment — With a traditional variable or fixed-rate mortgage, you might occasionally forget to send in a mortgage payment. Since you are making some kind of payment on your mortgage every time you deposit money into an all-in-one mortgage account, you are unlikely ever to miss a mortgage payment as long as you have an income.
• Interest Savings — As mentioned above, the structure of all-in-one mortgage accounts means that you save a lot of money over time with the best all in one mortgage rates. Loan principal is continually reduced and so is interest, and this can save you tens of thousands of dollars over the life of the loan.
• Complexity — An all-in-one mortgage is not necessarily difficult to understand, but it is a more complex financial product than a traditional fixed or variable-rate mortgage. It may be a little harder to keep track of money and how much interest is owed on each account if you have many smaller accounts or subdivisions within your all-in-one mortgage account.
• Increased Spending — With an all-in-one mortgage, you can withdraw money against your home equity. This can make it easier to spend more money than you are actually bringing in because it is so easy to access your home equity. A separate home equity loan is harder to access, so it is less tempting to spend too much when you have a normal home equity loan.
Is an All-in-One Mortgage Right for Me?
After reading all the main pros and cons, is there anything else that might convince you to select or refuse an all-in-one mortgage? The answer is yes. If you are a diligent saver, then an all-in-one mortgage is a great product for you. You are already putting away as much money as you can, and so you will do the same with an all-in-one mortgage and benefit from quicker principal reduction. On the other hand, if you have a tendency to be a free spender, an all-in-one mortgage is not a good choice, as it makes it easier for you to increase your indebtedness.
Fascinating All-in-One Mortgage Facts
All-in-one mortgages are interesting financial products. For example, did you know:
• An all-in-one mortgage in Britain is called an offset mortgage
• Lenders often require higher credit scores for all-in-one mortgages than they do for traditional mortgages
• All-in-one mortgages did not really start taking off in North America until 2008
Get the Best Canadian All-in-One Mortgage Rates Today!
Now that you know more about all-in-one mortgages, it is time to apply for one if you have decided an all-in-one mortgage is right for you. Choose a rate on this page or fill out the online mortgage application form for more information on all-in-one mortgages in Canada.
[show-menu menu=32 menu_name=”Mortgage Rates By Type”]
At MortgageRates.ca, we believe that all Canadians deserve access to financial tools, education and product comparisons to make more informed financial decisions.
How do we make money? MortgageRates.ca receives compensation when our users connect with providers and/or are approved for products offered on our website.
We strive to offer our users a robust list of the best products available in the market to compare, including those offered by Canada’s leading financial brands. Sometimes you may find products listed on other sites that are not listed on MortgageRates.ca. We have a vetting process and only feature products offered by providers that can offer amazing rates and service to our user base.
The fields to the left of our product comparison tables allow users to input details on their personal financial situation. Once inputted, the tables dynamically update to feature products best suited to the user. Terms and conditions will apply. All mortgages have specific qualification criteria including debt servicing ratios, credit, property value and property details. MortgageRates.ca’s product recommendations are based on the limited information provided by the user.
Your Request Has Been Received.
A licensed mortgage broker in your area will contact you with more information, answer any questions you may have, and make sure you get the right mortgage for your unique needs.
You are on your way to saving thousands of dollars per year on your mortgage. Get the recognition you deserve for comparing the market and getting the best rate. Spread the word on MortgageRates.ca with your friends!