One Account - really that good?

Doglover88

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

Am i missing something?

Rick62

Yes I think so. Post more details.

mummytwinton

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

Doglover88

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

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.

Rafter

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.

taketwo

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

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

Doglover88

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

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.

Doglover88

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?