One Account.com

reesla

Hi,

Has anyone taken out a One Account Mortgage? My husband and I are considering this option as our current deal is coming to an end in July.

We have around £2000 in saving, a personal loan with a balance of £14000 and £700 on a 0% CC (ends Oct 06). We bought our house for just over £60k and have almost finished renovating it. It is now thought to be worth between £95 to £105k (even up to £110k when the garden is done!)

My husband wants to take out a mortgage for £80k to pay off the loan.

We currently pay just under £400 a month mortgage, and £400 personal laon repayment. My husband says that by going with One Account they have quoted a mortgage monthly repayment for £80k as £405.

This means going from two debts (personal loan and mortgage) to just one - a mortgage. Our current mortgage does not allow us to make overpayments and this will free up an extra £400ish a month for savings or to overpay the mortgage.

Any advice - I just feel really overwhelmed by the number of mortgages there are out there!!

apcorbett

I have a one account mortgage (and now actually have a second mortgage on a different property with Intelligent Finance).

You can't beat the one account for flexibility - the only thing you need to get used to is that your current account will be £80k overdrawn all the time, so you need to keep a tight check on things! As long as you are within your limit, you can pay as little or as much as you want.

Intelligent Finance is also good, as it allows overpayments and a couple of payment holidays a year, it also pools all monies to save you interest payments, but unlike the 1 Account, you cannot choose the amount of the payments

Joe_Bloggs

What is the term of your mortgage. What term do you wan't ? What interest rate are you on at present. What rate will it become if you stay with your existing lender ? What is the interest rate on the loan. How long does it have to go.
I don't see how you can borrow £80K at 5.7% and only pay £400 a month unless it is intrest only or a repayment with a term of 50 years !
J_B.

jamesd

The One Account and offset mortgages in general don't sound like a good choice for your situation. The benefit from them comes from having savings to use to reduce the effective capital and since you have debt instead of savings, that eliminates the benefit. Also, The One Account has a high to very high interest rate compared to offset mortgages in general. Since a typical offset mortgage allows arbitrary overpayments and borrowing back of any overpayments, it looks hard to justify The One Account.

Instead of The One Account or an offset mortgage, what you might consider is simply a "standard" flexible mortgage. Today you can easily find those which offer unlimited overpayment, payment holidays and the ability to borrow back overpayments. Perhaps consider taking out a mortgage for 80,000. Then use the saved monthly payments to build up a flexible overpayment fund you can draw on. At 400 a month overpayment you'd have more than 5,000 in that fund by the end of the first year.

Where you should consider The One Account or, perhaps better, one of the other offset mortgages, is if you have say business funds you can offset with.

You might want to experiment with this flexible mortgage calculator to see what you can do with a flexible mortgage and overpayments. At 5% interest for 25 years on 80,000 it gives a monthly payment of 468. Overpay by 332 a month and that reduces the term to 11 years. If you wanted a lower minimum monthly payment you have the option of going with an interest-only mortgage. That would reduce the monthly payment to around 400 and any overpayments would then go to paying off the personal loan and mortgage amount. All of the amount of those overpayments would be available for you to withdraw if you needed to.

Saucepot

I agree with the above chap in regard to your personal situation. Putting a personal loan on a mortgage is expensive as the loan is paid off over the life of a mortgage which tends to be longer than a loan.

In regards to the one account itself. I have found it to be an excellent product. Good customer service. Though not immune to mistakes, they have handled and resolved all issues quickly and satisfactorily. I would recommend it to anyone who is in a position to overpay and clear a mortgage quick.

The one proviso I would add is that it is a product for those able not only to overpay, but also to budget. The mortgage as overdraft principle means that looking at your balance on a cash machine shows you the size of your mortgage debt, not your last wage packet minus spending. The online system though does allow for different account views and is logical and straightforward to use.

Tassotti

I disagree with the above post.

Okay you can get overpayment mortgages, but you have to specify each month how much you wan't to overpay.

With a One account, you pay in your salary and the interest is automatically reduced as soonas it is paid in

The interest rates look high initially, but it is like having an interest only mortgage. You only get charged the interest on the amount you owe, and if you save £50 per month will dramatically reduce your repayments.

I went 8 months without paying a thing into the account and nothing was said.

I paid off my 100K mortgage within 5 years, but still owe £2. I could withdraw £180000 from the cashpoint if they would let me.

What i am saying is the money is always there. Take it when you like as long as it is within your limit.

Good for people with sound financial sense, but if you are 'credit happy' beware.

Staff always happy to help..even lent me 100% on a buy to let that I have

Nice One Richard

In My op