one account

rjh090384

hi

i saw an advert for something called the one acocunt on tv. i looked at website and they say i can pay off my mortgage in 11 years which seems to good to be true. does anyone knwo anything aobut the one acount?

silvercar

read the sticky thread on offset mortgages.

Basically any balance in your current account reduces the interest payment on the mortgage. So if you build up savings you are reducing your mortgage payments, thereby building more savings to reduce your payments further and hey presto your savings build up until they equal your outstanding mortgage, then you can pay off your mortgage.

It does work if you are disciplined enough to build up savings. It also means that savings can be used to reduce your mortgage in the knowledge they are there if you need them.

The downside is that you won't be getting the best mortgage rate available, so it is generally only worthwhile if you have or will have 30% of your mortgage value in savings.

rjh090384

it seems a bit risky to me, you never know what is going to come up that you might need your money for!

silvercar

it seems a bit risky to me, you never know what is going to come up that you might need your money for!

You've missed the big benefit; any savings you have can be taken out. So while you've got savings they work for you, when you need the money it is there waiting. There is no obligation to keep any savings, you just benefit in reduced mortgage payments if you do!

MortgageMamma

you can take the money out if you need it. I think if you want to look into if further you should take professional advice, as offsets and bank account mortgages can be tricky and confusing for those not familiar with them. Added to that, if you do take one you need to be taught how to use them properly, other lenders have offset products too so one account might not be the most suitable for you.

MM

rjh090384

excelent thanks very much for ur help. its all very confusing

hlhassall

I have also just been looking into this and think it is definitely worthwhile. We can probably get our hands on over 30% of our mortgage value and I think the term of the mortgage and thus interest payments will decrease significantly.

MortgageMamma

quite possibly but there ar eother offset providers as well as the one account. intelligent finance for example where you can link an isa, a current acount and a savings account to your mortgage. decreasing the term even faster. you really need a professional to do a comparison of all these companies and do the maths as to what will reduce your loan the quickest.

MortgageMamma

dependent or not whether those funds could be needed for something in the future? if you just pay if off your mortgage, providing you don't have a borrowback facility you cannot get it back. its a handy way of putting your nest egg somewhere beneficial until you need it.