The One Account

Mortgage_Killer

Afternoon all,

I was wondering if anyone can tell me more about The One Account ? Is it any good ? What's the plus side, what's the negative side ?
Would anyone recommend it or would you say to stay well away from it.
Thanks....

penrhyn

Welome to MSE Killer!


Used to be the Virgin one account, combines your mortgage,current and savings into One account.
In simple terms this means that all the balances in your savings and current account offset the interest payable on the mortgage. So effectively your current account and savings account are paying interest at the same rate as your mortgage.
The way these accounts are put together vary with different banks.
I have an Offset mortgage with First Direct, which is very flexible.
At the moment the mortgage is substantialy payed off, but if I wish I can borrow out of the mortgage up to my limit.
The way First Direct do it it just appears as another normal account that you can pass money in and out of, very useful if you need cash quickly to buy that bargain car!

The only downside is that you need to be a bit disciplined with your money.

crazymum_2

We've got a One Account, absolutely fantastic. Totally agree, they are brilliant if you are reasonably disciplined with your money, could be a bit of a nightmare if you're not. The phonelines are never too busy, staff are very helpful, you can organise your account over the phone or online. The online service is excellent, very easy to use. I would never change our mortgage again.

KTF

Its not suitable for everyone. You need to do the sums but (on average) you need about half your mortgage amount in savings before you get any benefit.

Browntoa

plus sides as above + the interest rate goes down the same day (or it used to...got the feeling they delayed it for a month last time)

minus....interest rates go up the same day as the bank rate and no cap....

I've had mine for 8 years and would not change to a normal mortgage, bought a car and had a load of building work done and still ahead of plan to pay it off

bunking_off

See here.

I also provided some links to further threads, within the above ref'd thread.

Best bits : Flexibility, eye-opening about the benefit of paying your mortgage off early, ability to stooze (put your mortgage on 0% credit cards)

Bad bits : Ability to get yourself into real trouble if undisciplined, rate isn't as good as best deal (though considerably better than many SVRs), means that to match best deals you need to have a reasonable amount of savings to offset (although NB I've had 3/4 of my mortgage on stoozed cards, which makes the rate effectively 1.4%!)

tee_pee_2

do you just get a 0% crdit card and transfer the money into your mort account?

frible

Had one when it was Virgin One, agree that the service received was very good, but was a bit put out after we had a letter saying that they would no longer track the Halifax standard rate (the Halifax had just brought out a secound "standard" rate that was a fair bit lower), this despite the fact that the sales literature said they promised to track the rate. The letter was put in such a way as to try and pass it all off as a benefit for us!

We were also not diciplined enough, so although we put a cash lump sum of 35k in, after that each month our balance was going up. I think this had alot to do with how the money was all put into one pot with one statement, we would have found it better with seperate accounts for mortgage, current account etc. I believe he IF account does this, with all the jiggery pokery of offseting done in the background, but as we never had one of those accounts I could be wrong.

Overall I would say that the flexibility is great, provided you are diciplined and you have a decent chunk of cash to put in to fund the savings. Would I use it again, no, but then again I no longer have the cash to make it worthwhile.

bunking_off

tee_pee wrote:

do you just get a 0% crdit card and transfer the money into your mort account?

Sort of. There's a Visa card associated with the account. The way that this card works is that the balance on it (+ve or -ve) is swept into the One Account once a week. So all you do is

a) to get the money from the "stooze" card - do a BT to the One Account Visa card. A few days later it will automatically credit the One Account.
six/nine months later...
b) to get the money back to the "stooze" card - pay the bill from the One Account like you would any other card.

To confuse things, one of the best stooze cards is a Virgin Visa, operated by MBNA. This means you end up doing a BT from a Virgin Visa (MBNA) to a Virgin One Account Visa (RBS). It all works, though.

bunking_off

frible wrote:

Had one when it was Virgin One, agree that the service received was very good, but was a bit put out after we had a letter saying that they would no longer track the Halifax standard rate (the Halifax had just brought out a secound "standard" rate that was a fair bit lower).

As a matter of interest, how long ago was this?

I've had a One Account since 2000 and can't recall them ever committing to track anything. Maybe my memory fails me.

In practical terms, until the last interest rate change, they've always put the rate up/down at 1800 on the day that the BoE changes the rates. However, "to align with RBS systems" they're now doing it at the end of the applicable month : not happy with this and told them so...

frible

bunking_off wrote:

As a matter of interest, how long ago was this?

I've had a One Account since 1990 and can't recall them ever committing to track anything. Maybe my memory fails me.

In practical terms, until the last interest rate change, they've always put the rate up/down at 1800 on the day that the BoE changes the rates. However, "to align with RBS systems" they're now doing it at the end of the applicable month : not happy with this and told them so...

We took this out in 2001 and cancelled it when we moved in 2002. As far as committing to anything, it was in the information leaflets but not in the t&c's and worded such that it was not binding to them. I quite liked the account, but as I said, we were not diciplined enough with it. Now we have a repayment tracker, which works out alot cheaper for us because we budget and keep to it now. Took out £80k over 15yrs, 18 months ago, and looking to clear it in another 4 yrs, I dont think we would have managed that with the one account, it was too tempting to spend.

Dont want to put anybody off, just to say its not for us.