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One Account Advice

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Hi all

I'm sure this has been covered before so apologies if it has...
I've just been advised to change my mortgage and move to a one account. Does anyone have a view as to whether this would be a smart move or a stupid one?

regards
John
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Comments

  • homer_j_3
    homer_j_3 Posts: 3,266 Forumite
    depends on your specific circumstances. Who advised you and why?
    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.
  • jabei
    jabei Posts: 11 Forumite
    An IFA.....I wanted a view on the interest rates increasing all the time...I have around £55k debt (inc Mortgage) on an income of around £40k.

    The picture he painted was very rosy with a One Account - almost seemed too good to be true !!
    micheal5kr.gif
  • homer_j_3
    homer_j_3 Posts: 3,266 Forumite
    is he recomending the current account mortgage or just the flexible one?
    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.
  • jabei
    jabei Posts: 11 Forumite
    The current account
    micheal5kr.gif
  • homer_j_3
    homer_j_3 Posts: 3,266 Forumite
    it can be good for people who are strict with spending and running their accounts. You have to set up the accounts in a certain way to maximise the effect.

    I think if you use their credit card, they take payment fortnightly too so use your own to pay for all your expenses and pay that back with your interest free period.

    without knowing your exact situation its difficult to say. Its variable rate, it needs strict running of your bank account but can be beneficial.
    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.
  • trf1960
    trf1960 Posts: 129 Forumite
    If you are the kind of people that homer describes then yes, it is an excellent product. If you spend every penny every month and/or use an overdraft forget it (they probably would not consider you suitable for their product if you did anyway!).

    All I know is that we paid off our £84K 'borrowings' in five years and am now debt free.
  • jabei
    jabei Posts: 11 Forumite
    Thanks for that.. still don't understand exactly HOW the fast debt clearance happens
    micheal5kr.gif
  • AndyWallace
    AndyWallace Posts: 253 Forumite
    You build up savings in addition to repaying your mortgage payments. For every additional £ you save, the mortgage balance (for interest purposes) is reduced by the same amount.

    When you have built up sufficient savings, ie the amount you owe on your mortgage, you are debt free.

    A common misconception is that people are led to believe they retain their savings, which of course isn't true.
  • Pollycat
    Pollycat Posts: 35,739 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Savvy Shopper!
    This type of mortgage was perfect for us, we too are 'debt-free' - and lovin' it! :j :j :j

    but, for most of the people we know, it just wouldn't work.

    As Homer says, you need to have a certain (strict) mentality towards managing your money.

    If you're not that type of person, it could be the worst financial decision you ever make.

    Think carefully.

    Polly
  • kenshaz
    kenshaz Posts: 3,155 Forumite
    Part of the Furniture Combo Breaker
    Pollycat wrote: »
    This type of mortgage was perfect for us, we too are 'debt-free' - and lovin' it! :j :j :j

    but, for most of the people we know, it just wouldn't work.

    As Homer says, you need to have a certain (strict) mentality towards managing your money.

    If you're not that type of person, it could be the worst financial decision you ever make.

    Think carefully.

    Polly
    I agree play the game and you are quids in,exactly the same principle used in
    0% interest rate card movement,if you are savvy go for it.Financial institutions
    statistically evaluate the consumer and the odds are on their side with this product.
    [FONT=Arial, Helvetica, sans-serif]To be happy you need to make someone happy.[/FONT]
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