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

wymondham

Cleaver wrote: »

You're right about having a good deal. However, I believe people on here refer to it as a 'lightbulb moment': mine was our last mortgage statement which said that we had paid around 26.5K so far to the building society, of which around 8k was capital and 18.5k was interest. I was like, "Right, that's it, this debt is going!".

Whilst GG and gm4l make very valid and accurate points, I'd like to add another angle...

I had all the same discussions prior to my taking on a One Account. Whilst looking at it strictly financially it is probably not the best way to go (as listed in the above posts) it somehow made sense for me to do it this way....

You have a relatively small mortgage, and intend to overpay by a considerable amount - not indending to keep the mortgage more than a few years or so - this is the way the One Account (and other CAM's) work best. With this in mind the interest rate is not quite so important due to this timespan and rapidly reducing capital. You can overpay as you please and can add in savings to get this going. You will reduce your mortgage quickly whilst still having access to this money should you require it (safety net to replace your savings - wise in this climate!)..

Once I decided on this way to go I pooled everything together and got rid of the mortgage in 9 months (had a bad endowment to cash in/savings etc..). I have no idea if this was the best way of doing things, or how much I could save by doing this another way, but I liked the whole ethos of how the account worked.

This is just how I looked at it - I was criticised for it by the number crunchers (probably rightly so!!), but I just wanted to put another angle on this for you. You said you have read other posts on this way of doing things so hopefully you've seen all the good and bad points ........

getmore4less

I still don't understand why this make the one account a good option,

Take the Barclays option it is a CAM like the one account and an offset and allows cash ISAs,

That is ALL the features of the One account and more for less interest.

Ok when you do this quickly the extra cost of higher rate is small, there is no feature of the one account that makes it stand out.

Or is there one I don't see?

wymondham

getmore4less wrote: »

I still don't understand why this make the one account a good option,

Take the Barclays option it is a CAM like the one account and an offset and allows cash ISAs,

That is ALL the features of the One account and more for less interest.

Ok when you do this quickly the extra cost of higher rate is small, there is no feature of the one account that makes it stand out.

Or is there one I don't see?

I havent specifically pushed the One Account ahead of any other CAM supplier, it's just this is the one I had so have direct experience of it. I personally don't like Barclays for lots of reasons (mainly poor service in the past), but do like One Account for their excellent online account website and top notch call centre service (from sunny Norwich, just up the road from me!).....

Cleaver

After doing the research and taking in to account all the advice on this website and forum (what would I do without it?) the missus and I have decided to take the plunge and go with The One Account. The advice on this particular thread was really useful and as a few people advised against The One Account I thought I'd state why we went with it.

1) The rate wasn't that important to us. I know that statement could get me lynched on this site, but let me explain. We currently have 20 years to go on our mortgage if we left it as it is, paying off around £130,000 over these 20 years. Moving our savings to The One Account and paying it off aggressively as we can over the next two years will get it paid off. The interest we will pay to The One Account will be around £5k, instead of the £50k on our standard mortgage, so a difference of 0.5% to 1% between this offset and another wouldn't make too much of a difference in the whole grand scheme of things.

2) The fees are very cheap. I'm being charged about £220 for my application fee and mortgage exit fee (most of this being application - exit fee is £30) and then £140 for a valuation. The equivalent offset from my current mortgage provider costs over £100o in set-up fees and valuations.

3) I've heard lots of good things about his account - the website, the customer service etc. I've had two phonecalls with their call centre so far and they've been really excellent and actually come across as human (the guy on the phone asked if I found my job dull as it sounded very dull to him. I agreed it was and he stated that at least I should be grateful I'm not working in a call centre. I sometimes forget that employees of companies used to have senses of humour).

4) The Woolwich / Barclays product was not really an option: as of 2005 I made a decision that I would never even say the world Barclays again, let alone buy any type of product from them.

So we should be moved to this mortgage over the next few months.

I therefore have a new set of questions about using this account! For example...

• Is it best to have all direct debits set up for a certain point of the month?
• Should I start this stoozing that everyone talks about?
• Is it best to get everything on a credit card then pay this off each month so the money stays in the One Account for longer, or best to flow it in and out throughout the month?

My wife thinks I'm very sad getting excited about a mortgage. She won't be saying that when we go on our first holiday paid for with the money we don't have to use to pay the mortgage with anymore...
.

Gorgeous_George

I won't comment on your decision except to say that I think that you have missed the point!

Cleaver wrote: »

I therefore have a new set of questions about using this account! For example...

• Is it best to have all direct debits set up for a certain point of the month?
• Should I start this stoozing that everyone talks about?
• Is it best to get everything on a credit card then pay this off each month so the money stays in the One Account for longer, or best to flow it in and out throughout the month?

• as late as possible
• yes
• yes

GG

Cleaver

Gorgeous_George wrote: »

I won't comment on your decision except to say that I think that you have missed the point!

You agree I'll save thousands though?

Gorgeous_George

Cleaver wrote: »

You agree I'll save thousands though?

Without doing the sums, I can't say one way or the other.

My gut feeling is that you could have made a better choice (lower interest rate & offset).

But if you are happy, that's good enough.

GG

Cleaver

Gorgeous_George wrote: »

Without doing the sums, I can't say one way or the other.

My gut feeling is that you could have made a better choice (lower interest rate & offset).

But if you are happy, that's good enough.

GG

Well I've saved around 45k compared to just sticking with my original mortgage plans.

Say I had picked a different mortgage that was 1.5% lower rate, would this make much of a difference on a 54.5k loan over 2 or 3 years?!

straddie

Cleaver wrote: »

Well I've saved around 45k compared to just sticking with my original mortgage plans.

Say I had picked a different mortgage that was 1.5% lower rate, would this make much of a difference on a 54.5k loan over 2 or 3 years?!

For the record, if you'd taken First Direct's fee free offset tracker (BR + 0.99%), you'd have saved somewhere in the region of 1.5-2k - that's assuming rates don't drop in the next year (many think they'll drop quite a bit).

Well done on your action plan though, wish ours could be paid off that quickly!

getmore4less

How do the One Account do it I am mistified.

What are you doing with your ISA money?

Don't forget the true saving is reduced by the amount you would have got by just saving the money anyway.