"THE ONE ACCOUNT" any advice/experiences?????

kershaw39

Mr MSE has replied to a message i sent him on this type of account and hes already reviewed them in his mortgage guide ........ so ive down loaded it and im now clear on them ....... i think ill just wait untill we are back 2 wages ..... kids at school and start overpaying on my own best buy mortgage to knock down the years as he suggest .........

jamesd

It has a very high interest rate compared to the BoE+0.25% for an offset account that you can get for a lifetime tracker from the likes of Britannia or Hinkley and Rugby BS. Why pay 6%+ when you can pay 5% instead?

If you think the One Account is good, just try comparing it to one of those accounts and see how much better they are.

andi2

I love my One Account & after 2 years we've paid off quite a large amount (50k).

One thing they don't make clear is the interest tiers, for example I pay 5.85% because I took out a less than 50% of the value of the property mortgage. The interest rate rises as you want a greater % of the value.

We spend on the credit card every month & then pay off in full - leaves the cash in the account saving us interest as long as possible.

I do think it would be a bad idea if you're prone to spending whatever is available though as you can spend up to the value of your facility without any permissions etc being needed.

skim

jamesd wrote:

It has a very high interest rate compared to the BoE+0.25% for an offset account that you can get for a lifetime tracker from the likes of Britannia or Hinkley and Rugby BS. Why pay 6%+ when you can pay 5% instead?

If you think the One Account is good, just try comparing it to one of those accounts and see how much better they are.

It depends on how you work it.

e.g say I want a £120,000 mortgage & I have £60,000 savings but still want access to them if needed.
Take out a £120,000 loan with OneAccount, they take off £60,000 because you've left it in the account & therefore the repayments are £381 per month.
I'm also saving between £1000-1500 per month so that figure would come down fairly rapidly

Plus the fact that your salary is in there so theres a few more thousand that you are not paying interest on & if like andi2 you leave the full amount in the bank & pay for everything with a credit card & pay off in full went the bill arrives then it makes a huge difference.

If you don't use an offset mortgage you are also having to pay tax on the interest you accrue on £60k & at my rate thats 40%

This all works because of the amount of savings - if you haven't got any then it's not worth it.

Snapdragon

I've had a one-account for 7 years and think its brilliant.

I agree that it is particularly good for people who are disciplined with their money. I love the fact that I am overpaying every month without having to make any effort to do so because once my wages are in there anything I don't spend comes off the mortgage. I've even taken to using a few 0% credit cards so that I can leave my wages in the account until the end of the 0% period and then just pay them off.
I don't have to worry about unexpected bills because the facility allows me to spend more than goes in, if needed. It also means you never require a loan at some exhorbitant rate. When I changed the car, I used my debit card for the £9000 I needed and paid it pack within a few months rather than a loan over a longer term.
I'm amazed to read that anyone who has had this style of account would go back to a 'normal' account. By comparison the old days (pre-one account) seem such a lot of hassle.

Hope that helps anyone thinking of this sort of change.
Snapdragon

wymondham

snapdragon, thanks for that - what is their online site like - easy to navigate/manage etc?? How do you find their customer service (and are they UK based?)

andi2

Only problem I have with the website is that it doesn't update till about 8am (was used to 12 midnight with my old bank). Not a major problem - I'm just sad & like to check it early in the morning!!

greengrass

kershaw39 wrote:

Hello

I'm looking for advice on moving my accounts/savings/mortgage to the ONE ACCOUNT....... i've search on the site and the forums and its not turning up any results ...... has this type of flexible account been reviewed by martin ??? or money savers ???

Hi Kershaw,

My husband and I started the one account march last year and we love it, every month your statement shows how much you are paying off your mortgage, you do have to be disciplined but its certainly worth it. I use credit cards for the month then pay them off at the end of the month that way the money you leave in your account is working for your mortgage.

Hope that helps.

Snapdragon

wymondham wrote:

snapdragon, thanks for that - what is their online site like - easy to navigate/manage etc?? How do you find their customer service (and are they UK based?)

Web site easy to use, though I must admit these days the account pretty much runs itself and the monthly statement is detailed, so I rarely need to go online. Yes, UK based customer service, always found them easy to deal with. If they can't answer a question, someone rings you back.

jamesd

skim wrote:

It depends on how you work it.

e.g say I want a £120,000 mortgage & I have £60,000 savings but still want access to them if needed.
Take out a £120,000 loan with OneAccount, they take off £60,000 because you've left it in the account & therefore the repayments are £381 per month.
I'm also saving between £1000-1500 per month so that figure would come down fairly rapidly

The other accounts also let you offset savings, but you only pay 5% interest on the 60000 that isn't offset.

Best case then for the One Account Current Account Mortgage is a facility of up to 50% (property value 240000) at an interest rate of 5.85%. On the 60000 not being offset that's 3510 in interest.

For those two at 5% the interest on the same non-offset 60000 is 3000.

Say you make 5000 a month in salary and have 1000 a month that you move to savings, the rest is spent at an even rate during the month so you have an average of 2000 in salary in the account at any time. That saves you 5.85% on 2000 or 117 a year.

Net result: at 50% LTV the One Account is costing you 393 a year more.

But that's the best case for the One Account interest. Here are the other cases:

under 50% LTV: 5.85% 393 a year worse off
50.01-75% LTV: 5.95% 451 a year worse off
75.01-80% LTV: 6.05% 509 a year worse off
80.01-85% LTV: 6.15% 567 a year worse off
85.01-90% LTV: 6.30% 654 a year worse off
90.01-95% LTV: 6.45% 741 a year worse off
95.01-99% LTV: 6.70% 886 a year worse off

It doesn't stop there, though. The best cash ISA around is paying 5.75%. Since the other mortgages only charge 5% interest you can put 6000 a year (assuming you're married) into the cash ISA and gain an extra 0.75% on the money over the One Account. It's only 45 in the first year but that rises to 225 more after 5 years (30000 in the ISAs) and 445 after 10 years. The others are so cheap that if you have cash ISA available it doesn't even pay to offset. The One Account is so expensive that you can't beat it with savings.

skim wrote:

If you don't use an offset mortgage you are also having to pay tax on the interest you accrue on £60k & at my rate thats 40%

Assuming no cash ISA allowance left, anyway. I hope someone with 60000 in an offset account is putting all 7000 or 14000 for a couple a year in equities and doens't really have cash ISA available.

Snapdragon wrote:

I've had a one-account for 7 years and think its brilliant.

I agree that it is particularly good for people who are disciplined with their money. I love the fact that I am overpaying every month without having to make any effort to do so because once my wages are in there anything I don't spend comes off the mortgage. I've even taken to using a few 0% credit cards so that I can leave my wages in the account until the end of the 0% period and then just pay them off.
I don't have to worry about unexpected bills because the facility allows me to spend more than goes in, if needed. It also means you never require a loan at some exhorbitant rate. When I changed the car, I used my debit card for the £9000 I needed and paid it pack within a few months rather than a loan over a longer term.