One Account - SVR only up?

bunking_off

Locoblade wrote: »

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.

Let's not turn this into a debate on the merits of the One Account.

What I'm not clear of is whether any of the other accounts actually outwardly portray the loan as a big loan pot. I know they take into account money in current, savings & mortgage pots and apply interest on the net balance, but the "lifestyle element" of the OA is that it's not just for the purposes of interest charging, it's e.g. when you go to the cashpoint and get a balance of account it's presented as an enormously big overdraft rather than "you've got £X in savings (oh yes, don't forget the £XXX mortgage)". For me, it's that big overdraft which focuses my mind to clear it ASAP rather than having the paradigm of a mortgage being a loan that's paid off over a fixed period of time....I genuinely don't know if the other offsets can operate in that manner and would be interested to hear.

For me, the differential e.g. between the Woolwich offset and the OA is 0.6%. To change to Woolwich requires a £995 application fee and probably a valuation fee, not to mention hassle of moving all of my current account affairs (DD etc) across. Those application fees amount to >2% on my outstanding mortgage balance and that'll be gone by next year...QED not worth the move for me.

It is unavoidable that all current account/offset mortgages are "sticky" in that they're a pain to move provider. Guess that's why the banks can get away with charging a premium.

getmore4less

bunking_off wrote: »

I genuinely don't know if the other offsets can operate in that manner and would be interested to hear.

You can with the Woolwich/Barclays offering by having a large reserve mortgage current account and just paying off the regular mortgage account from that reserve.

Locoblade

You can't say "lets not get into the benefits and downsides" then make a statement as to why its superior without expecting somebody to challenge it

Im not sure if others do the "one big pot" system granted, I know First Direct don't, preferring to keep current account, offset savings and mortgage pots seperate. I can see where you're coming from if seeing a huge overdraft on your current account gradually reduce is what motivates you to save further but I still don't think it warrants the additional interest charged in most cases. For example the FD offset lifetime tracker is +0.99% over BoE (over 0.7% below One Account?), for me that rate means £70 a month less interest to pay compared to a product at 6.7%, and even if seeing the big overdraft did motivate me, I can't see how Id save £70 extra every month purely by having the accounts laid out slightly differently. To make the most of the FD style offsets coming from a One Account you'd obviously need to adjust your lifestyle/thinking slightly again to suit that instead, but if you got regular balances (to your mobile if required) to keep you motivated and ensured you transferred surplas money at the end of the month into the loan pot to show reduced capital then I can't see it being a whole lot different at the end of the day.

The other thing with this particular example is there's absolutely no fees and no tie in at all, so the only issue is the hassle of transferring bank accounts.

getmore4less

The other thing the One account do is encourage people to offset their credit card debt which is silly and should not be done.

You should run seperate credit cards and stooze.

I gave up on this lifestyle debate because it come down to the only benifit is having a big red number at the cash machine.

There have been plenty of opportunities to switch to cheaper products some at base+<0.5 and fee free.

Keep looking there is likely to be another deal at some point.

Gorgeous_George

Let's face it, the One Account is for psychologists/sociologists.

Engineers and mathematicians choose to run mulitiple accounts and can do the sums themselves.



GG

bunking_off

Funny that, I am an engineer (albeit with an MBA now more of a general manager).....

For what it's worth, I pay 6.6%, so 0.6% more than the Woolwich product. As I say to swap to it would cost me best part of 2% of my outstanding balance so not worth it now. When I could have got a positive benefit by switching - ie when I had a higher balance - I couldn't because there were no alternatives (if that made sense?)

Each to their own....it's worked for me, I'll have paid off in 8 years overall.