one account

planettess

I am looking to re-mortgage, my mother-in-law swears by the one account as it reduces your term of lending by half therefore reduce the interest earned! does anyone have more info on this or agree with my mother-in-law?
Cheers
Tess

CloudCuckooLand

It doesn't automatically reduce the term or interest, at all.

You need to offset spare money against it to get that effect. Having your monthly income paid into it, to immediately offset, will have a degree of effect, but to get a halving of the term would need a substantial saving pot in situ.

So, you could, instead, simply get a mortgage "half" the size - using your spare funds as a bigger deposit - to get a similar effect.

The benefit of OneAccount, is in having the funds on hand for emergency/necessity, whereas a Lender might not allow you to extend the smaller mortgage method, to release equity, at the right time.

Compared to 'normal' deals, you may find OneAccount a bit more expensive, to pay for this availability of funds.

Its possible, if your LTV is radically reduced by having a much larger deposit when using your spare cash, for the saving to be even greater with the smaller mortgage method, due to better interest rates.

Depends if you want a large lump sum readily available, and are happy to pay a bit extra for it, I guess.

getmore4less

The one account is not the cheapest offset.

It ONLY works when you overpay/offset just like all the other mortgages out there, nothing magic or special about it.

The one account on-line calculator can make it look like it is better than the rest but it cheats by counting mortgage payments twice if you are not carefull.

Nearly everyone that has chosen the one account has paid more for their debt that they needed to.

Saran_2

With interest rates due to increase over the next years it is unclear what the One Accounts interest rate policy is. They are not linked to Boe, Libor or any identifiable source - pretty much up to how they feel.

Wouldn't risk them, as getmore4less says, they are expensive and if you don't need the flexibility, not a good option.

getmore4less

Saran wrote: »

With interest rates due to increase over the next years it is unclear what the One Accounts interest rate policy is. They are not linked to Boe, Libor or any identifiable source - pretty much up to how they feel.

Wouldn't risk them, as getmore4less says, they are expensive and if you don't need the flexibility, not a good option.

If you do need the flexability they are still not a good option.

They offer nothing that other offset options from the likes of First Direct or Barclays in terms of flexability

They used to go upto to 99% LTV but looks like 75% now, allthough the calculator will still let you go to 99%