The Oneaccount

jamesd

dzdoris, sorry, the One Account is one of the most expensive mainstream mortgages available today and Martin recommends against it in his guide, presumably for that reason. The concept is great, the problem is the high interest rate.

I suggest that you work through the calculations in the example yourself to see the effect of the higher One Account interest rate on your own mortgage.

If you have any trouble please let me know the details of your mortgage and I'll work through the calculations for you.

Back when it was first introduced the One Account was much more interesting. In those days the competition was non-flexible mortgages using annual interest calculation and that's what the One Account still compares with, even using the very expensive SVR of those mortgages. Today the comparable products are daily interest calculation flexible and offset mortgages which are usually significantly cheaper than the One Account. It was a revolutionary product but times have moved on since then.

wymondham

can i but in jamesd and ask if you can do the same for me if i supply my mortgage details, as i'm considering oneaccount? thanks!!

Monkeymia

jamesd wrote:

If you have any trouble please let me know the details of your mortgage and I'll work through the calculations for you.

I sure would appreciate this help to - got really bogged down with all the choices etc and how much it would cost to change.

yummymummy79

I always use to sing the praises of our One Account, but now reading the various threads on it I'm not so sure! I would like to consider switching to a different offset or regular mortgage with overpayments, but not at the moment as OH became SE very recently so we would be very limited with options. Has been very handy to have the buffer that the OneAccount gives though whilst we are reduced to one wage though. Will be looking into switching later in the year so may be back!

wymondham

i get the idea the oneaccount is a good account with excellent flexibility etc, just cost more than others. my mortgage will only be £35k with 15k savings so i have a feeling it could work for me, but just want to make sure (i like the features of the oneaccount over others)......

dzdoris

:T Thanks for your reply jamesd :A

Do you just need the balance of my mortgage?

jamesd

See this example. I'll need all the numbers that have to be entered there:

• property value (affects loan to value and mortgage rate)
• mortgage term - how many years left
• mortgage balance - amount outstanding on the mortgage (less any savings you want to keep apart from it)
• savings that you want to offset with (the ones from the last line)
• the amount you regularly overpay on average
• current monthly mortgage payment (so I can check the calculation)

Wymondham, you're right: it's a really great package of features, the price is the only problem with it. With 15k in savings you'll probably be better off with Intelligent Finance if you want to move the 15K gradually to cash ISA savings - that's a really handy option they offer - or some other place if not.

dzdoris

Hi jamesd

I couldn't get the link to work for the "this example" link.

Answers to your qustions:

Property Value - (based on re-mortgage valuation) £130,000

Mortgage Term - 22 years

Mortgage Balance - £73,022

Savings - Unfortunately we spent our savings in a car that has proved for the last year to be nothing worth more than taking to the scrap yard :mad: so we're back to £200 at the moment!

Amount we overpay - I'm afraid we're not in a financial position to do that at the moment because tax credits messed that one up for us :mad: :mad:

Current mortgage payment - this is probably another area we've messed up on and It's only just dawned on me in the last week! We have always payed £525.00 but as there's been 2 interest rises and with a "normal" mortgage they put your payments up don't they? Well we haven't upped ours I'm afraid

I await my fate

bunking_off

wymondham - in your position (not far different to mine, as it happens), you should be very wary of arrangement / closure fees...£500-1k fee on a £100k+ loan is neither here nor there, but when you're down at £30-odd k it makes a huge difference, particularly if you think you can get that cleared in a couple of years.

dzdoris - I wouldn't be presumptuous enough to offer you advice, but based on your post, the oneAccount isn't for you. It does suit some people, but if you've no savings and are not overpaying, you're better off with a conventional mortgage (probably fixed rate in current environment).


Incidentally, to anyone who's offsetting (either via a conventional offset or current account mortgage like the One account) - have you considered pooling the family finances? My in-laws were looking for the best return with no stock market exposure (they've been stung in the past). I looked around, and we concluded that the best deal for them was to put the money in my One Account. No skin off my nose - I just pay them the interest rather than RBS - and they get 6.35% net interest. Obviously, need to have a trusting family relationship but it's an option worth considering - hey, you might even split the difference on the the extra interest they're getting versus mortgage interest you're saving.

dzdoris

Thanks bunking_off :T

Just let me check I'm understanding your other idea. If I was lucky enough to accquire some money off the family and put it in my oneaccount. I assume that money would only earn interest if it was higher than my mortgage? i.e. amount outstanding on my mortgage is £73,022 so it would only earn interest if we put say £83,022 into the account.

Sorry if I sound so dim but I'm not well up on these mortgages and still trying to get my head around this oneaccount :huh: