All-in-one Accounts; Good, Bad, Ugly?

Hoggie78

I'm due to change my mortgage in March, and recently this all-in-one style mortgage and bank account has been brought to my attention.

I've been on the website and it all appears too good to be true, paying my mortgage off in 11 years as opposed to 23.

Can anyone advise me of their opinions or experiences with this style of account/mortgage.

Thanks.

hoggie78@hotmail.co.uk

Maid_of_Kent_3

I endorse everything Al Mac says above. It has really worked for me. I have been able to significantly reduce my mortgage, on track to pay it off much much earlier and reduced my monthly costs.

But it does take discipline and if you are the sort of person that sees the difference between what you owe on your credit card and the credit limit as being there to be spent, then this kind of account isn't for you

Bernie

Me too! Mortgage completely offset - we've effectively "spent" all our money by buying a house yet retain the use of it and still have our ISAs intact (though not earning interest, we can transfer funds from our offset deposit account each year).

Once we've paid down the capitol enough, we intend to transfer each ISA and TOISA out of the offset.

After that, when we feel comfortable, we'll pay the whole outstanding mortgage off.

This offsetting malarkey has been a total boon for us...

UK007BullDog

They are good for people with strict discipline or who are in a secure well paid jobs who receive regular bonuses/lump sums.

Personally I would not chose an account like this as if you should ever lose your job and the income stops coming in the bank will know immidiately. You cannot bluff them for a while or even keep them in the dark if inbetween jobs for a couple of months. You are putting all your eggs in one basket.....

silvercar

we have an offset mortgage that has an associated offset savings account attached rather than a current account. Most of the benefits apply but it is easier to see what money is where, as you deliberately transfer money into the savings account and can take it out as and when you want. Our current account is unconnected.

Manty

silvercar wrote:

we have an offset mortgage that has an associated offset savings account attached rather than a current account...

Which company is this with if you don't mind my asking?

silvercar

Coventry Building society.

Bernie

Manty wrote:

Which company is this with if you don't mind my asking?

...for all the mortgage offsetting stuff, we still keep all our current account stuff in Smile with whom we have banked with online for years. We could not see any benefit in rolling our whole financial lot into one. We preferred to keep things simple and in discrete accounts.

:beer:

Bernie

Al_Mac wrote:

But for every pound in your smile account, you aren't reducing your mortgage, sort of defeats the object:rolleyes:

...I didn't making it clear that we ensure our IF accounts collectively contain enough funds completely offset the mortgage advance.

For us, our mortgage is effectively a 10 year interest-free loan since the money we have deposited with IF has been "spent" already in buying the house. This means we did not have to cash in our ISAs/TOISA, we can keep transferring money from the offset deposit account into our ISAs each year while we pay down the mortgage. Each year we can place another £6000 of our "savings" from our IF offset deposit account into the tax-free wrapper of our IF offset ISAs.

As we pay down the mortgage, we intend to transfer out the ISAs as soon as each can be removed from the offset.

jamesd

If by all in one you mean a current account mortgage, check the interest rate. Some, notably the One Account, charge a very high interest rate that makes them very expensive. Offset mortgages do better but even there you do need a fair bit of offset value to compensate for the higher interest rate you'll pay for an offset mortgage.

Bernie, worth remembering that you can currently get 5.75% tax free from Ruffler Bank in an ISA, so it may actually pay to transfer the ISA there and pay interest on the mortgage.

jayne.doe

Sorry to hijack this thread am I using my one account properly.? I have had it now about 2 months. Apart from a couple of direct debits i had to pay towards the middle of the month i pay all dd`s around the 19th. I have another account I take money from up until the 20th, this has a free overdraft factility.

I also use a tesco cc interest free until May for all other spends, ie food. I dont pay this off only the minimum, however i keep the money i owe the tesco cc in my one account. I will have enough to cover all the money for the tesco cc once the interest period expires. O/h gets paid on the 20th and I get paid on the last day of each month. I am finding it hard to leave any savings in at the mo because it has been christmas. I never touch the allowance we have been given. Any advice would be fantastic and really appreciated. I roughly have around 2 and a half thousand hanging around in the account for most of the month.

We both have secure jobs,well as secure as anything can be o/h is an asst head and i am civil servant.