One Account - SVR only up?

Rossco

Hi,

As a One Account holder I have seen the interest rate charged on my mortgage go up inline with the BOE base rate and swap rates pretty much within days of them happening. On the flip side as the BOE and swap rates have come down I have seen my mortgage rate stay the same.

I'm aware the product does not promise to be a tracker but the T&C's never said it only went up inline with BOE's but not down. I get the impression that if today BOE rates go up so will the One Account's else no change. The method doesn't seem paticularly transparent to me, anyone have any clue how they decide on the interest rate? My guess is if they see people can take the pain on the rise (low number of defaulters) then as Yazz said "The only way is up, baby".

Ross.

getmore4less

One account has always been expensive but people still take it for some reason.

Change to another lender that have proper tracker offsets.

Ian_Griffiths_Halifax

I thought everybody knew the simple calculation involved:eek:

The Base Rate is set by Sheila in the canteen. On the first Thursday of every month she looks out of the window and sees if it's raining. Raining means a rise, Sunshine means a fall, Snow, Wind or Hail means a hold on rates.

As we have more Rain than Sun, Snow, Wind or Hail, then it's obvious that rates are going to be on the up! How bad has the weather been both last summer and this?

I didn't know there were people like you still around.

Rafter

Only way to get certainty is to switch as a tracker as suggested.

HBOS (who own ONE) have been having difficulty getting wholesale funding and have seen their cost of money increase. They are unlikely to pass on base rate cuts unless they have to, although at some point they will reach a tipping point where losing too many customers becomes counter productive.

Presumably if you are on a variable rate, there is no tie in or early redemption fee? So why not switch to another offset provider with either a tracker rate or a decent fix.

First direct spring to mind if you still want current account functionality and as long as you have a decent amount of equity in your home?

R.

klaatu

We used to be with The One Account, and for our low LTV the rate was good. We switched temporarily to the A+L for a good 3-year deal, with the intention of going back to the One Account afterwards (i.e. now). But after their recent rises we're going with the HSBC lifetime tracker instead.

HBOS don't own the One Account, by the way, RBS do.

Steve

Rossco

Thanks for the advice. At the time my decision to go with the One Account was based on the fact there were no redemption charges, minimal fees with a slightly above average rate of interest I could offset against. I'll take a look at First Direct's offering as I feel like I'm now wasting money.

Cheers.

Ian_Griffiths_Halifax

Rossco wrote: »

Thanks for the advice. At the time my decision to go with the One Account was based on the fact there were no redemption charges, minimal fees with a slightly above average rate of interest I could offset against. I'll take a look at First Direct's offering as I feel like I'm now wasting money.

Cheers.

Just a word of warning about First Direct. It's Karen in the Stationary Dept who sets their rates on the 2nd Monday of the month based on what she was wearing around town the previous weekend.

Stockings - Stay Up

Tights - Come Down

Rossco

Hmmmm. I'm more of a stockings man (not wearing them before you ask) but in this case I can make an exception.

Locoblade

Ian_Griffiths_Halifax wrote: »

Just a word of warning about First Direct. It's Karen in the Stationary Dept who sets their rates on the 2nd Monday of the month based on what she was wearing around town the previous weekend.

Stockings - Stay Up

Tights - Come Down

With the offset tracker you just need to be concerned about how the BoE decide their rates, probably not dissimilar to the above though it has to be said.

bunking_off

Bit of misinformation on this thread...the One Account is run by RBOS, not HBOS.

It used to be a JV between Virgin and RBOS. At that time interest rates used to go up/down in line with base rates, generally at 1800 on the day they were announced...ie defacto it was a tracker, though not contractually so.

Since RBOS bought out Virgin, the change appears to have been that generically they go up immediately following the BoE announcement, but only come down on the 1st of the month after the downward BoE announcement.

The one exception to this that I can recall is that when base rates stayed on hold recently, RBOS chose to increase their margin and up the One Account interest rate by 0.25%. I don't think they were alone in that...

I won't go into the merits and faults on the One Account here because they've been discussed at length many, many times. In brief, if you run it as a conventional mortgage it's a bad product. If you run it as a lifestyle change, the interest rate isn't that material because other aspects such as changing the way you look at life swamp any extra cost.

Locoblade

bunking_off wrote: »

I won't go into the merits and faults on the One Account here because they've been discussed at length many, many times. In brief, if you run it as a conventional mortgage it's a bad product. If you run it as a lifestyle change, the interest rate isn't that material because other aspects such as changing the way you look at life swamp any extra cost.

That's a valid point, but as mentioned in many of those other threads, if you compare it against other offset current account mortgages, the One Account doesn't offer much, if anything that other offset current account mortgages can't offer at a lower rate (Woolwich, First Direct etc), so if you're happy to make that lifestyle change you mention, you'll save even more with other lenders.

If the One Account was the only offset product you could justifiably compare it against a conventional mortgage and point out the savings despite the higher rates, but when there are other offset products at lower rates, that argument falls a bit flat IMHO.