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Home Financial Health Blog Active retirement - the early years Save thousands in interest on your mortgage!

Save thousands in interest on your mortgage!

by Tim Weichel

Most Canadians manage their finances by doing two things:

  • Depositing their income and other short-term assets into chequing and savings accounts.
  • Borrowing when they need to, through mortgages, lines of credit, personal loans and credit cards.

Sounds simple enough. Unfortunately, they usually receive low or no interest on the money they deposit, while they pay high interest on the money they borrow.

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Wouldn’t it make more sense if the deposits and borrowings were combined? Why not have every dollar you earn paying down your debts until you need to use that money?

A unique new product called an all-in-one account does just that – and more! It brings your mortgage, savings and income together into one multi-purpose “borrowing and chequing” account.

Now, your income could instantly reduce what you’ve borrowed. As you pay bills and other expenses throughout the month, the amount you owe will slowly go back up, but you’ll still be much further ahead. With an all-in-one account, every day that even a dollar of your income stays in your account, you have less debt, so you pay less interest.

The idea behind an all-in-one account is simple: having your income and savings work harder to reduce your total debt faster.

How an all-in-one account works

The concept of having an all-in-one account makes perfect sense: bring all your banking together to simplify your finances so your income and savings can work harder to reduce debt faster.

Consolidate your debts
When you open an all-in-one account, you can borrow up to 80%* of the appraised value of your home. Use this money to pay off the balance of your existing mortgage, personal lines of credit and any other outstanding debts you might have and lower your interest costs at the same time.

Put your savings to work
If you’re tired of earning little or no interest on your chequing account, savings balances and short-term investments, an all-in-one account can help put that money to work for you. It applies those balances against your borrowings, instantly reducing your total debt… and saving you much more in interest costs than you’d likely ever make in interest earnings. And, you can use that money whenever you need it (up to your borrowing limit).

Put your income to work
By adding your regular income to your all-in-one account, you further reduce your debt the instant the deposit is made. Your income is immediately working for you to help reduce loan interest costs until you need it for your monthly expenses. With even one extra dollar of your income in your account, you reduce your debt faster, so you pay less interest.

An all-in-one account could save you thousands in interest costs and help you become debt-free years sooner compared to your old way of banking. Calculate your savings.

Why switch to an all-in-one account?

If you’re ready for a new way of banking, call me or send me an email and I will set up a no-obligation appointment for an education session with our professional banking consultant. 416-230-2703 or 705-798-0062 or tim@timweichel.ca

*Effective November 15, 2012, if you set up a new all-in-one account and request a credit limit between 65% and 80% of the value of your home, the amount above 65% must be allocated to a term sub-account in which the credit limit of your overall account decreases by the amount of the principal payment.

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