Re question on one account or offset mortgage

teacup_2

Hi in January my current mortgage deals ends. So I am thinking of what to do next.
My mortgage is about 46,000 over 17 years. It seems to go down so slowly and it is a straight repayment mortgage.

Would you go for a one account /offset mortgage style.
At the moment we pay £360.00 a month off our mortgage, so can afford to pay that in to a one account mortgage and maybe £50.00 to a £100.00 extra.

please can you advise me in simple terms! as I have limited knowledge and not sure. What would you do to pay mortgage of sooner:j !!

any help greatly appreciated x

sdooley

If you ever use your overdraft I would go for the offset option where the positive balances count towards reducing your mortgage interest while the negative balances you just pay interest on as they arise (at a higher rate but it isn't added to your mortgage to be paid over the next however many years).

The offset option is also good as you can put all your savings (other than ISAs perhaps) into the offset account - they are still there for you to use but will reduce the interest on the mortgage.

The one account is pretty scary - you have to be very disciplined not to keep it from growing or reducing at a reduced rate by spending more.

Locoblade

Ive been looking at offsets too recently and I think we'll plump for one of the First Direct options.

As mentioned, the OneAccount style scares me a bit, as all you see in the account is a huge overdraft equal to the amount left on your mortgage. Although though its only really psychological, I much prefer the way FD do it whereby you have a current account that you can keep in positive balance, and seperate pots for savings and the mortgage debt meaning you see money flowing through your finances in a similar way to you do with a conventional mortgage etc, therefore Im sure it will be far easier to keep track of monthly spend without being tempted / inadvertently dipping into the equity in the mortgage.

wymondham

teacup wrote: »

At the moment we pay £360.00 a month off our mortgage, so can afford to pay that in to a one account mortgage and maybe £50.00 to a £100.00 extra.

On a One Account, whatever you have left in your account at the end of the month is classed as the mortgage payment - would this figure still be £50-£100 or would this be more?? (take away your outgoings (not including your current mortgage payment - ignore this) minus your total income and this is the figure..)

teacup_2

many thanks for replies, still thinking about what to do, its all some mind boggling!