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

wymondham

Cleaver wrote: »

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...
.

Now you've made your choice, you'll find it a very liberating means of paying off your mortgage. You seem to have gone down the same thought processes I did, and came up with the same outcome - best of luck to you, I'm sure if you are financially savvy you'll be fine and quite surprised just how quicky you can see the balance come down. I know people batter the product, but if the rate is not that important due to timescale, then there is not really too much in it other than personal preference and experience.

getmore4less

Cleaver wrote: »

1. Is it best to have all direct debits set up for a certain point of the month?
2. Should I start this stoozing that everyone talks about?
3. 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?.

1: This makes a tiny difference to the overall cost a lot less than picking a cheaper product would have done. Max saving is the same as if you had paid one extra payment equivilent to the total spend but will be a lot less in practice.

2, Borrowing any money cheaper than the mortgage rate is worth while,
(you made it easier going for a high rate:D )
2a, Get a 0% purchase card for slow stooze.
2b, lifetime BT card with low fees can be better than a 0% card with higher BT fee.
2b, 0% BT watch the fees.

3. see 2a. this is better than paying off every month.

Don't forget that keeping your ISA intact will same more in the long run than cashing in and offseting the mortgage.

Cleaver

straddie wrote: »

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!

I expect to pay a total of 5k interest over the next two or three years or so. Would moving to a rate that's just 0.7% percent less really save me 2K??

Thanks for your best wishes!

Cleaver

getmore4less wrote: »

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.

True. But... and I intend to get slaughtered for this too!... I've never really been that fussed about savings rates. We had what I believe you guys call a 'lightbulb moment' a few years ago and sorted our finances out. This ranged from ceasing to be idiots and not letting ourselves go overdrawn, setting up direct debits to pay credit cards in full, setting up a comprehensive budget that meant we regulated our spending to personal, holiday, christmas, car etc. pots. It was this that really sorted us out and we started saving a lot of our money instead of dwindling it away on things we didn't need. So I think our ISAs are current at a rate of 5%, but I don't even know. Which I know isn't amazing, but if you'd told me a few years ago I'd get my !!!! in gear and save 27k I would have laughed in your face.

So I think we shall throw the ISA money towards the mortgage. I just want the damn thing paid!

Locoblade

A £54k loan borrowed over 2 years at 6.7%, paid back in equal monthly installments generates interest of about £3850 overall. At 5.99% its £3430, so just over £400 saved.

If you include say £2k average balance in your current account by paying all the bills at the end of the month, you're looking at interest overall of £3560 and £3180 respectively.

getmore4less

It is fantastic progress but if you are happy to pay tax on savings thats fine.