we have a virgin one account but think we need to change any advice?

pinkparrott

Hi all we currently have a virgin one account mortgage with £75k outstanding, in march next year we will get about £25-27K from an old endowment we had and we also have about another £10k also in endowments that mature by 2014. I really want to remortgage in March when we get the endowmwnt payout and think that as we only require £50K and our house is valued at £270K that we should be able to get a good deal.

However my husband want to stick with the one account as he thinks it will get paid off quicker, however we have no savings as such in there and were not overpaying/leaving much in at the end of the month at the moment as i have recently gone to work less hours after returning from maternity leave, so were playing catch up for a while.

Our APR is about 6%, i think we would be better getting a new mortgage thats not offset, but where we can make overpayments if we have some spae cash once we get back to normal.
any advice/ opinions on this thanks, am quite new to this and have just gone along with hubbie before but think were not doing as well as we could.

silvercar

compare interest rates!

I would say it is safe to leave an offset account if you know you won't want to touch the money from the endowment policies. If you think you may need the money then it will be far easier to use this money than borrow elsewhere.

bunking_off

If you're not making overpayments, then you're not exploiting the One Account so you're probably best off binning it. It's a good account when used to the full, but expensive when not exploited.

In your situation I'd remortgage at the £50k level (ie use your endowment to pay down the outstanding amount) with a lender that (a) allows penalty free overpayments, (b) offers a lower interest rate and (c) has a low application fee....this latter aspect is particularly material given the size of your loan means any fixed fees could be material.

Mr&MrsSkint

My wife tried to reply but it appears not to have worked.

We changed to a tracker with Alliance and Leicester about 2 months ago, but would warn about making sure that any credits you have in your One Account are clearly included in the calculation or not. Despite instructions to the contrary my salary was used to offset the final amount leaving us really short for one month (our loan is £172,000).

When we did go to another bank, interestingly the owners of the One Account, they couldn't help us so you need to be sure what your sums are! Also in closing your account watch changing the Direct Debits, virtually everyone messed up and some still have yet to get their act together. It may be easier to keep the One Account live as your bank account.

Hope this helps, but I would say ditch the One Account as unless what you spend is much less than income ( we have three young children) then you can't maximize the benefits.

MarkyMarkD

Your husband sounds like a One account dream customer - he's happy to pay over the top in interest rates for flexibility/offset features which you aren't using. The same must apply to lots of offset/One account customers.

I would recommend remortgaging elsewhere, but I don't agree entirely with bunking_off. If your income will support it, I would remortgage for the full £75k on a mortgage which allows overpayments, underpayments and payment holidays. Then as soon as you've remortgaged, pay off the endowment amount as an overpayment, and you'll still have the flexibility to underpay slightly or draw down from that overpayment if you need to.

I think paying off the capital and borrowing the smaller amount is restricting your options for no good reason.

pinkparrott

Hi thanks for the advice, we may remortgage for £75 and then keep the £25 endowment capital elsewhere for a while as we are thinking possibly of extending the back our our house for more living space, instead of moving as we live in an expensive area and can really afford what we want.
I'm sure we would still pay off the mortgage just as quick with a normal repayment mortgage making overpayments.
thanks

stu3105

Pink
We were in a similar situation about 6 months ago with Virgin One,we kept our 'mortgage part' with them on their Flexible Mortgage Account,this has all the same benefits, over/under payments in fact at the time our interest rate was reduced from 5.6% to 4.99%.

We then opened one of Lloyds TSB classic plus current accounts to feed the mortgage. I have to say that this has worked better for us as with the one account things tended to run away with themselves. We are now able to make monthly overpayments and watch our mortgage shrink.

good luck.