Better mortgage deal for moving current account

theredmini

Hi all,

about a year ago, I remortgaged. I renewed my mortgage with my existing provider - Britannia. This time, I was offered a better interest rate if I moved my current account to the Co-op, which now of course is part of the same group. At the time, this seemed like a good idea, as the rate difference was significant enough to make it worthwhile and it's so easy to switch current accounts these days, it was no real bother.

A year on however, I'm getting frustrated with having my account with the Co-op for various reasons and I'd like to move back to Barclays, who I was with previously.

When I took out the mortgage, the implication was that I would have to keep my current account with the Co-op for the duration of my mortgage. Is that the case, or could I now move my account somewhere else and retain my existing mortgage rate? I thought there might be some FSA rule about keeping customers by linking one product to another?

Cheers,
Neil

ACG

I used to work for co-op - i had left a year ago, might have been 18 months ago i left.

Dont quote me on this but i dont think they check once the mortgage has gone live. I dont think there is an FSA rule, you cant have it both ways - you took a deal out and now you want renege on it - they do reserve the right to put you on the SVR rate (4.74? off memory) but i would be surprised if they knew what another part of the business was up to.

gjchester

theredmini wrote: »

could I now move my account somewhere else and retain my existing mortgage rate?

Move your day to day banking elsewhere, just fund the Co-OP account with enough to cover the mortgage a few days before its due. Extremly easy with a fixed deal as you can simply set up a standing order to BACS it across a few days before, Slightly harder with a variable figure but just leave a few hundred as a buffer in the Co-OP and check each month or so the amount taken and adjust the SO/BACS payment every so often.

theredmini

Thanks for the replies guys. I guess if they're not monitoring the account for my salary being paid into it, I could just move enough to cover the mortgage every month via standing order, as suggested by gjchester. That would be easy enough to do, as it's a fixed rate mortgage.

One alternative that I've thought about in the past, but never got around to doing is doing all my spending on credit card, then paying off the balance every month, so I don't get charged any interest. My Barclaycard has an excellent web banking setup, so this would make it much easier to track my spending than on the Co-op's awful internet banking. I could then leave all my direct debits etc in place and I'd just have to make sure I pay off the full balance every month, which again, could be done via direct debit.

That approach does open up another can of worms though, in that if I'm going to be doing all my spending on a credit card, I should probably go for a card with better cash-back type incentives than my current Barclaycard. Wow, this personal finance thing really is a minefield isn't it ;-)

Cheers,
Neil

moneysavinggirl40

what you describe with your credit card is stoozing, have u been to stoozing forum. I started doing this 2 yrs ago with 0% purchase cards, set to pay minimum amount by direct debit. Saving what i didn't spend in First direct reg saver or nationwide 5% current acc, and of course maxing my isas. Then pay off credit card in full just before 0% ends. You can set up tart alert on mse website which sends a message to you that you have to pay your credit card in full when its time. I also have a paper record of dates when i take out my card and when it should be paid off by. Good luck.