We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

One Account - really that good?

Options
I thought I'd try out the one account mortgage shrinker and was amazed at the results.. has anyone else tried it and is it working/did it work for you? I've just let a room in my property and was working on the side of caution, but I thought could be done if i tightened the purse strings. Basically it claims I could pay off the £110k I owe (currently over 21 more years) in a little over 4 years!! I've been over it a few times with a friend and still works out the same I just cant get my head round it :confused:

Am i missing something?
«1

Comments

  • Rick62
    Rick62 Posts: 989 Forumite
    Yes I think so. Post more details.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • don't forget what you will be spending each month. it asks you what you will be paying in each month & what is left after all your out goings?

    we have had it for 7 years but now going to A&L for 5y fixed. Virgin rates are high
  • Rick, you mean post more of my details?

    mummy, it asked me to put in my total income then what I thought I'd have left at the end of each month, I was as accurate as I thought I could be and didnt think i missed anything it just seemed (and probably is) too good to be true
  • Rick62
    Rick62 Posts: 989 Forumite
    Yes, more details.

    The assumptions it makes are not realistic. For instance, the money left over each month it assumes are additional capital payments, in which case you could just overpay a conventional mortgage.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Rafter
    Rafter Posts: 3,850 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    By all means use the calculator but don't buy the product!

    You can get much better value offset mortgages with capped rates or fixed rates as well.

    Have mine with First Direct - same mortgage rate as their standard mortgage but I can offset and make overpayments at will. You also still get to see how much is in your current account, savings, loan and mortgage rather than having them all grouped in one scary lump in the one account - much better.

    R.
    Smile :), it makes people wonder what you have been up to.
  • taketwo
    taketwo Posts: 98 Forumite
    I got all excited too, then realised it was all too good to be true!
    Whatever savings you put in, it eats up, as the date the calculator is giving you is when your balance is zero, so yes the mortgage is gone, but so are all your savings, and yes, whatever amount you say you have left at the end of the month also gets eaten.

    Still trying to decide whether one of the other offset accounts will really beat a remortgage with the Nationwide, but keep going round in circles!
  • yus786
    yus786 Posts: 676 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    It also depends a lot on how much saving you have.

    I've decided to stay with them as i do have a fair bit of saving being offset (nearly 30%) so paying interest on only 51K
  • Rick heres my figures I used (approx)

    House value: £180,000
    Mortgage: £110,000
    time remaining: 21 years
    overpayment %: 0%
    monthly paid in: £2800
    remaining at end of month: £1400
    no savings:
    Yearly bonus: £4500
    Company scheme: £13,000 in 2 yrs time

    I think thats everything, the reason I checked it out was I will be in a position to make more overpayments than 10% each year and wasnt sure if many mortgages allowed this?
    Ideally I'd love a fixed rate for 5 years that allowed me to make overpayments as and when I wish
  • Rick62
    Rick62 Posts: 989 Forumite
    Their projection of 4 years is on the basis that the £1400 left at the end of each month is then used to repay capital on the mortgage (ie a new extra £1400 each month!).

    With no savings just go for the best rate you can find and then make overpayments as and when you can.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thanks Rick
    Do the majority of Mtg lenders only allow 10% overpayment each year? If thats the case I guess I could go for a fixed 2 or 3 year deal, overpay the max allowed and save any extra I can and at the end of my new 2 or 3 year deal, use what I've saved to reduce the amount needed for when I search for another deal.. does that make sense?
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.4K Spending & Discounts
  • 243.7K Work, Benefits & Business
  • 598.5K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.