"All in One" Mortgages

linzbrown

My fixed rate with Lloyds TSB has come to an end, and I am considering either 'The One Account' or 'Virgin One Account'.

My current mortgage is £105K, and house is worth double that.... Don't have much in the way of savings or loans. Are the benefits are great as their site claims? What are the pitfalls? Why isn't everyone doing it if, as they claim, you can pay off your mortgage isn 2/3rds of the time?

Thanks!

wymondham

Hi Linz
Both of these accounts are the same now. Take a look at this thread for a discussion on pro's/con's etc:

http://forums.moneysavingexpert.com/showthread.html?t=338410

People love it or hate it (the bovril of the mortgage market!)

linzbrown

Thanks for the link, helpful reading. Still a bit concerned I won't be able to overpay too often so the potential benefit might be minimal. Hmm.

apk1

If you don't expect to have an average of 10-15% of your mortgage in savings then go for a conventional mortgage unless the features are worth more to you.

"One" type mortgages are generally a con for most people unless they have significant savings.

pusscat

We use the Woolwich Offset mortgage (actually it is now a Barclays one since last week!) - mainly because both Mr P and I are IT contractors so our money arrives in fits and starts. We can use the money saved for tax payments as an offset until it is required, we can also survive for periods when there is no money coming in by using the offset funds to live on.

It works for us, but we do have an offset of a very high percentage of the mortgage so the interest rate is pretty irrelevant to us.

The rates are a bit higher than the best deals you can get - so it depends what works for you.

I like the principle - it is simple and all of our savings/borrowings are in one place! We also use a credit card (cashback of course!) for all of our monthly spending, we then pay it off in full at the end of the month so the maximum has sat in the offset all month. We also have all dd's set to as late as possible in the month, again it leaves the money in our account as long as possible.

I probably would not use it again if I was remortgaging in the near future - mainly because if I owe a lot of money I can get a better rate with another type of product - just use an overpayment facility.

You do have to be financailly disciplined to use an offset - there is a lot of cash available to withdraw potentially - you have to be able to resist that urge.....

Horses for courses I guess!

Puss
xx

apk1

Pusscat, you are a perfect example of where an offset works, large savings from time to time, but potentially you also need to draw on these so could not be used to repay a conventional mortgage as a capital repayment.