The One Account?

teabelly · 10 February 2008 at 5:01PM

Offsets are ok if you have the savings in the first place. If you don't then the one account can work well as you only have one pot and it works like a large overdraft. It does well to remind you that a mortgage isn't just X per month but XXX thousand pounds of real money. After paying a normal mortgage for a few years and seeing just how little of the balance is chipped away in the first few years the one account is a revelation as you can set about really knocking into the outstanding balance.

The best bit is that you can throw every spare penny into it and get it back the moment you need it. With flexible mortgages there is always the doubt of whether you can draw it out again if you have to and there is a delay. With the one account you have the pot of money and you can either put more in or take more out as you see fit up to your facility at a moments notice. It also means you can effectively be interest only or overpayment whenever you need to so it is very flexible with coping with disaster which might sink you with a normal mortgage.

After all that praise it isn't the best interest rate you can get. If you are prepared to shop around every so often, and over pay you may be able to pay it off quicker and earlier and more cheaply with another mortgage. Arrangement fees can ruin any savings if they are high enough, ditto redemption penalties so you have to check the small print when re-mortgaging for all those seemingly better rate deals out there.

wymondham · 10 February 2008 at 11:49PM

Capricorn_One wrote: »

Maybe I'm missing something but isn't it just an offset current a/c mortgage?

yes it is!

Audinary_girl · 24 February 2008 at 1:02AM

monkeyman120168 wrote: »

:j Thank you for helping me out Freedom Girl. I was doing it late at night & was worried I had missed something as the figures seemed so amazing!! I really appreciate your help with this.
I am quite disciplined with money (she says after going into B&Q y'day to buy a curtain pole & coming out having bought two bathrooms!!!!) so I think we will be ok with the account. I always save for Xmas, bills & holiday each month & if any money is left this goes to wards the mortgage - fingers crossed we can be disciplined. I think going to the bank & seeing how much we are overdrawn is a fabulous incentive for anyone to not spend unnecessary money:eek: :eek: ........
I have a list of questions for the bods at the One Account and am going to give them a ring this afternoon & then if all looks ok will take the plunge & be (hopefully) mortgage free by 2014:D :j
Thanks again for your help - you are a star!!

Dear monkeyman120168 vbmenu_register("postmenu_8238283", true); - I've just come across this thread tonight (much food for thought as we're thinking of re-mortgaging and would love to be able to pay it all off in 10 years - instead of the current 18+) - just wondered what you decided to do in the end - did you open a One Account ??

jamesd · 24 February 2008 at 9:41AM

Anyone interested in the One Account should be aware of some alternative current account mortgages:

Cumberland Building Society can offset one current account and one savings account. Remortgage 5.84% (BoE+0.59%) up to 90% LTV with 375 fee, 500 Pound ERC for12 months.
Barclays offset mortgage lets you offset with up to four current accounts and twelve savings accounts. The current interest rate is 6.2% (Barclays base rate (danger, may not track BoE rate!) +0.69%) with a 595 fee and maximum 80% LTV. No ERC.
Intelligent Finance, often large fee, ERC but can offset cash ISA as well as current account and savings, so you can keep the ISA tax benefit after the mortgage ends. Does fixed rate offset as well as tracker. Remortgage offers: 6.24% (BoE+0.74%) 75% LTV tracker has fee of 799. 85% LTV same interest rate, fee rises to 1999. Up to 90% (can do for 85% also) 6.34% (BoE+0.84%) with 999 fee and ERC or 6.85% (BoE+1.35%) with 999 fee and no ERC or 6.14% (BoE+0.64%) with 1499 fee and ERC. One and two year fixes for 5.79 to 6.29% at 90% LTV.

There are others, these are just a few alternatives that offer similar features at lower cost. The end result: it's really unlikely that the One Account is the cheapest choice even for someone who can benefit from a current account mortgage.

At the time I write this the 75-80% LTV rate on the One Account is currently 6.55% and the lowest for up to 50% LV is 6.35%.

Hobo_2 · 25 February 2008 at 2:16AM

Looking @ Barclays offset tracker myself.
Have plenty of funds to offset,so am looking at it from a Tax saving angle, beyond use of our Cash ISA allowance.

Barclays/IF, as well as allowing cash ISA offset, are the only ones to allow the amount borrowed (Interest Only) to remain outstanding till the end of the agreed term.
So therefore if you 100% offset you pay them nothing, each month that is so.
Even the One account has a reducing Facility!

Had a One Account, a few years ago ( Stoozing Heydays) very efficient.

Suited the purpose @ the time,just a couple of points i noted

Not really a mortgage is it, just a big overdraft
life cover , if died while heavily offset,would only outstanding balance be covered?
Maybe mortgage/savings pot has an advantage there.

Notice a lot of " cannot belive its that good" comments on One account threads regarding the shrinker calculator.

Good or is it?
People look @ the end date, but if you pile all your monies ( right thing to do for max effect) that date is point" ZERO"

Mortgaged payed but not a bean to your name!!

So wheres the contingency fund/ money to live life @ thatpoint?

Just my 10p worth;)

wymondham · 25 February 2008 at 10:53AM

good point raised. the house is yours, that's more than a bean! once you reach the point you've settled the mortgage then you start saving like mad!!, with the advantage of being able to save very quickly as no mortgage and you still have access to the funds of the mortgage if you really need it ... best of both worlds..
you then insure yourself against any interest rises etc - in fact you then want interest rates to rise to help with the savings...

ixwood · 25 February 2008 at 3:03PM

First Direct are doing some pretty good offset fixed deals at the moment:

http://www.firstdirect.com/mortgages/rates.shtml

The 10 year one looks good to me. You'd save a packet over trackers, unless IR's were 4.5% for the next 10 years.

ixwood · 25 February 2008 at 3:05PM

Oh and Barclays use Indian Call Centres, so it's an avoid for me.

I usually dislike the service, think the security is worse, but mainy think it stinks that companies are sending everyones jobs abroad (and the fat cats with their snouts in the trough get paid millions for doing it). We should not reward it IMO.

In 5 or 10 years time, how many/what jobs are going to be left?

bunking_off · 25 February 2008 at 4:06PM

Hobo wrote: »

Even the One account has a reducing Facility!

Does it? I've recently reduced my facility, but it was made clear that it was entirely down to me & they were happy for me to leave it at the initial level if that's what I preferred.

Jhayda · 25 February 2008 at 4:20PM

It does automatically reduce on a yearly basis....or at least ours does...

The One Account?

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