Inteligent finance vs one account

ard123en

Hi All

We are looking to move and set up a new joint mortgage

I really like the idea of off setting as we have quite a lot of joint savings in isas ect

I.F. is the top runner at the mo as we can transfere our isas in they say isas and will still have their tax free status after the mortgage is paid off

are there any other offset / over payment deals worth looking at

have discounted the one account as both myself and my other half like the idea of having our own current accounts and isas

ard123en

Joe_Bloggs

This does assume that ISAs have any status at all after 2010. I hope you get a good rate of interest and can continue saving.

There is no restrictions to having many current accounts. ISAs are for individuals. IF are quite good and quick. They are into Jars of money which is strange at first.

YBS don't yet allow ISAs into offsets but they do allow family members to offset savings against the capital of the mortgage of the mortgage holder. Don't ask me how this works.
J_B.

phjnj

ard123en wrote:

...I really like the idea of off setting as we have quite a lot of joint savings in isas ect...
ard123en

Surely there is no such thing as a joint ISA (hence the 'Individual' in their title!)

By wrapping your savings in an offset mortage, surely their as good as Tax-free savings anyway, as your not recieving interest on the savings, merely reducing the amount of interest you pay on your mortgage.

Please correct me if I'm wrong, I'm about to move from a One Account Flexible Mortgage to their full current account

Joe_Bloggs

@phjnj
I can't see where you are wrong. I hope you paid nothing for the full account and get value for money. What rate are you getting these days ? Does it make sense with the amount of savings you have ?
J_B.

phjnj

It'll be free to switch.

I'm starting with £2k savings (my other savings are all Tax-free), and regular savings/overpayments into the account of £1.5k. Our joint income is around £4.5k per month, which we plan to pay into the account.

Any opinions would be welcome

Joe_Bloggs

@phjnj
I would not have started on this path with so little in savings to offset in an offset mortgage. I thought the flexible mortgage mentioned was an offset without a current account. If you can build on these offset savings then why have you not done so ? If you have put your savings in cash ISAs do think you will get better than the 5.7% rate you may be paying on your mortgage ?
Let's hope eventually your savings get to match your mortgage balance. Would you pay off the mortgage at this point ? I might be in two minds. A few on these forums get to make the decision for real.

The potential to mess up with one of these mortgages is huge. I hope you are good at accounting for things when they all get added together.
J_B.

phjnj

Thanks for the opinion. Your right, I have little in savings to offset, but that should soon mount. I have around £24k in joint cash ISA's, which I was saving for a rainy day (4.5% at Nationwide, 20 year account holder, will they ever demutulise?)

I didn't think I could offset against my One Flexible mortgage? I don't want the hassle of tarting around my mortgage, and I need a cost effective (to a high rate tax payer) savings account for this spare £1.6k per month.

Any advice gratefully recieved. (Theres a beer in it for you:beer: )

silvercar

With such a small amount of savings initially, look very carefully at the rate you are paying. Offset is all well and good but you don't want to pay for the privilage. There are some offsets around under 5%.

phjnj

IF are offering 4.9% for 2 years, not all fees covered. But is it really worth it? The (dodgy) One Account illustrator guesses I'll be paid off in 3 year anyway!

Edit: The fees would be £199 the IF, £75 to redeem the One, I'm only saving £350 moving from the one before fees! and the IF calculator says mortgage paid in 3 years too!

Joe_Bloggs

When I said the flexible One mortgage was an offset I meant by its flexible nature you could have paid in savings, reduced interest charged on the capital and attacked the capital with normal repayments. If needed you can get your savings out again. Whilst in the mortgage they don't attract interest.

The point in time refered to in the shrinker example is when savings equal outstanding mortgage. It is a break even point, perhaps stalemate as nobody pays any interest. You can get 4.95% BofE full term tracker for a bigger fee with YBS.
J_B