The One Account - can anyone tell me if I'm going mad?!

wymondham

Cleaver wrote: »

Yeah, that's pretty much what I did! We will be using all of our savings just pay off a lump sum just before moving to The One Account, so no, we'll have no savings.

The figures above are correct figures of how we'll be doing things and I still can't work out how it gets our mortgage paid in 1year and 8 months!

Mr Cleaver

I'd go on your own figures! - if you go for it and keep in control (no LCD TV's/Sports Cars!) then you'll be surprised how inspirational the account is and how focused you'll become in reducing the mortgage - you'll do it quicker than you think I suspect - we did.

Cleaver

wymondham wrote: »

I'd go on your own figures! - if you go for it and keep in control (no LCD TV's/Sports Cars!) then you'll be surprised how inspirational the account is and how focused you'll become in reducing the mortgage - you'll do it quicker than you think I suspect - we did.

We work to a pretty tight budget now, all controlled via the most geeky excel spreadsheet you've ever seen (it even has a hidden sheet with formulas...). We know exactly how much we save each month, therefore we're confident about moving to this account. So I'm happy with the concept and the basics just still don't get the 1 year 8 month though.

opinions4u

I may be wrong, so a big caveat on this:

I think the calculator assumes your current outgoings includes your existing mortgage payment, and also assumes you are paying the same rate that One charge.

It's second assumption is that you will then overpay by £2,400 a month on top of this.

20 months of £2,300 = £46,000.

£11,383 = 20 months of normal mortgage payments including interest (nearly £570 a month).

If you really can manage your money brilliantly, you could be mortgage free by the summer of 2010!

Does this sound close to the mark to anybody?

If you haven't included existing mortgage payment in your outgoings, it looks like you should, so may be worth re-keying.

getmore4less

I did a try using your numbers and as O4u says it includes the standard payment in the calc.

Anyway

Once you decide that a CAM/Offset is right for you look for the best offering and it WILL NOT be the Oneaccount.

Barclays and First Direct are consitantly cheaper than the one account

If you plan to pay it off this quick then the fees will need to be considered.

One account 6.7% FEES ? Only legal and valuation ?

http://www.oneaccount.com/onev3/rates/toa-rates.shtml

Barclays 5.99% FEES £995 + legal and valuation(might still do a "switch&save"

http://www.woolwich.co.uk/mortgages/offset-mortgages.html

FirstDirect 5.99% FEES £0 offer runs out today might be another.
they also offer some Fixed rate offsets with follow on rate of 6%.

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

bubblesmoney

getmore4less wrote: »

I did a try using your numbers and as O4u says it includes the standard payment in the calc.

Anyway

Once you decide that a CAM/Offset is right for you look for the best offering and it WILL NOT be the Oneaccount.

Barclays and First Direct are consitantly cheaper than the one account

If you plan to pay it off this quick then the fees will need to be considered.

One account 6.7% FEES ? Only legal and valuation ?

http://www.oneaccount.com/onev3/rates/toa-rates.shtml

Barclays 5.99% FEES £995 + legal and valuation(might still do a "switch&save"

http://www.woolwich.co.uk/mortgages/offset-mortgages.html

FirstDirect 5.99% FEES £0 offer runs out today might be another.
they also offer some Fixed rate offsets with follow on rate of 6%.

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

the oneaccount cannot be accessed by natwest branch staff for admin or queries etc. so u wouldnt be able to go down to a branch and sort out any problems. u would be stuck with call centres

generally i found that natwest products are more expensive than other high street loan products. even the natwest staff admit that privately. in some cases like tracker mortgages even the staff mortgages of natwest turn out costlier than other high street products. so it is difficult for me to believe that natwest can provide a competetive product for customers when even staff mortgages (some types) are costlier than other high street options. precisely the reason why we have opted to ditch the natwest products even though they dont charge fees for staff mortgages (some types of staff mortgages not all types). their staff mortgage for tracker is 1.09 above base rate and it is not even a life time tracker. SAD to see a bank treating its staff less favourably than other offers by other high street banks charge for their customers (it might look more poorly compared to other banks staff mortgages without a doubt)

Gorgeous_George

(Edit 2) See my next post

If the whole £4,200 was used as mortgage payments, your mortgage would be cleared in 14 months. With just the £2,300 it would take 26 months (I used 6.7%).

(Edit 1)
So, to pay it off in 20 months, it may be that NatWest assume that the £1,900 that you spend each month (£4,200 minus £2,300) is spent at an even rate and interest is calculated daily.

I think the calculator is wrong. You need to pay £2,898 to clear the mortgage in 20 months and even if you spend at an even rate, you will not 'earn' £598 per month needed to complete in 20 months.

GG

getmore4less

Gorgeous_George wrote: »

If the whole £4,200 was used as mortgage payments, your mortgage would be cleared in 14 months. With just the £2,300 it would take 26 months (I used 6.7%).

So, to pay it off in 20 months it is assumed that the £1,900 that you spend each month (£4,200 minus £2,300) is spent at an even rate and interest is calculated daily.

GG

There is an error somewhere. loaned amount is £54500

20*2300=£46000 even at 0% interest the above would not work.

Gorgeous_George

I think the OP started with a ten year mortgage with repayments of £618.67 and is overpaying by £2,300 per month i.e., paying £2,918.67 per month.

This clears the mortgage after 20 months.

GG

bubblesmoney

Cleaver wrote: »

Maybe in the 12 years since doing GCSE maths some of my brain cells have faded, but can anyone help me with some maths as this just doesn't seem right to me!

The missus and I want to move to The One Account in January and get out mortgage paid off. I went to their calculator at http://www.oneaccount.com/onev3/calculator/index.html and put in our particulars:

House Value: £120,000
Amount to Borrow: £54,500
Total Joint Income Per Month: £4,200
Total Income Left Each Month After All Outgoings: £2,300
0% increase on payments each month
0 savings paid in to the account
no lump sums or other incomes

Now, when I press the 'show me' button it tells me that we could pay off our mortgage in 1 year and 8 months with the total amount repayable being £57,383

How can this be? Even if the interest rate is 0% and all of the spare £2,300 goes towards the mortgage, £2,300 per month multiplied by 1 year and 8 months comes to £46,000. So how would the original £54,500 be paid off?

I'm confused! I know there's some haters and lovers of this account on here, so maybe one or the other could help me out!

GG - the total income left over each month is 2300, so they cant overpay by 2300. the 2300 will be mortgage payment+overpayment

Cleaver

bubblesmoney wrote: »

GG - the total income left over each month is 2300, so they cant overpay by 2300. the 2300 will be mortgage payment+overpayment

Correct!

I'm thinking their calculator is a bit misleading.