The One Account

[Deleted User]

My apologise if this has been asked before, if so please forward me to the relevant posts.

A friend of mine has put me onto The One Account. In true MSE style I was wondering how many people here have this mortgage deal, what your opinions are and would you recommend it?

I am considering all options at the moment and would be grateful for any input.

I am aware of some quite good other mortgage deals (as seen online), but with some things cheaper doesn't necessarily mean best.

Many thanks

Bailey

Scott

The One account certainly gets rave reviews in the industry mags, wins innovation prizes all over the place, etc.

As far as I know, it's one of the better mortgages of it's type. But I've not had a huge amount of contact with it.

Browntoa

I've had one since Virgin ran it and would recommend it highly. I put all my savings etc in there from day one and get my pay to go in there and have always been ahead of my payment plan (currently £6000 ish) despite borrowing extra money for a new car at one point (which took about 5 mins on the phone !!). The phone is always answered quickly and politely by a UK call centre and the online banking side is a godsend for paying bills on time as you can enter the date the bill needs to be paid by and it sends the money out in time to pay the bill but in the meantime its sitting in your account earning interest

I would say you need to be good with money though as you can access all your money at all times, all they ask is that you pay off the mortgage before you are 65 . The temptation is there to spend up to your limit !!

Debt_Free_Chick

you need to do the sums. Generally, you pay a slightly higher rate of interest for an offset mortgage. You then need substantial savings to offset - as a broad rule of thumb, you need about 50%-60% of the outstanding mortgage in your savings account.

It's a great gimmick, but the financial benefits are felt only by the few who have enough money to offset, to get a real saving.

[Deleted User]

oh ok thank you very much

bunking_off

See http://forums.moneysavingexpert.com/showthread.html?t=40534

I have one, and am very enthusiastic. What I would say is that those people who do have one and get in the flow of it do tend to become evangelists for the concept. However, you do need to be disciplined not to just run up a massive debt.

I hear what D_F_C says about level of savings versus size of mortgage, but don't totally buy that myself. It is indeed true that one can yield a lower rate by going for the cheapest fixed rate, switching provider once it expires and making arrangements to overpay - however that involves cost & effort in seeking out/arranging your mortgage every couple of years, and effort in organising the overpayments. Too much hassle for me - with the One Acccount overpayments (and underpayments!) just "happen".

Also, it isn't as black & white as saying your savings are X% of your mortgage hence an offset deal is worthwhile : you need to consider "virtual" savings as well. Examples;

- if you back end all your direct debits in the month, then your salary is reducing your mortgage by that amount
- do you get travel etc expenses from work? If so, for the time between receiving them & having to settle your credit card bill (assuming you bought the tickets on credit), the money's reducing your mortgage
- load all of your expenditure onto credit cards. Pay off in full every month, but on average you'll get 6 weeks' interest free credit, during which time it'll lower the level of your mortgage
- go to the credit card board and take a look at Stoozing. All these credit cards which offer 0% balance transfers can transfer a fictional debt from the One Account Visa, putting that in credit and reducing your mortgage by that amount (I currently have £20k of my mortgage on 0% credit cards which saves approx £900 over the 9 month interest free period - I came across one fellow on there who has a One Account and has managed to off-load ALL of the debt onto 0% deals hence is currently paying *no* interest on his mortgage). Even with the £50 fees generally being introduced for balance transfers, One Account holders are up on the deal.

sassybird

I have had a Virgin One account for about 4 years now. I'm thinking of getting the house re-valued so I can move down the interest rate 'tree', thereby paying less interest. I think this will cost me approx. £200 for the valuation service (done through Virgin). Does this seem a good idea?

I'm also quite interested in this 'stoozing', I'll definitely have a look into that.

Browntoa

I had'nt thought about the "stoozing" either......guess where I'm off to now !!

bunking_off

sassybird wrote:

I'm thinking of getting the house re-valued so I can move down the interest rate 'tree', thereby paying less interest. I think this will cost me approx. £200 for the valuation service (done through Virgin). Does this seem a good idea?

I did this about 6 months ago, although to kill two birds with one stone : my house was a new build hence Virgin didn't need a survey when I moved in (happy with the house particulars/pricelist). I had a full structural survey & valuation to cut the interest rate a bit, but also to identify any snags I'd missed/give me something to beat the builders up with.

My payback period was about 5 years on this, but for a more basic £200 valuation it should payback more quickly...worth doing I'd say. Why not "insure" yourself and get a free valuation from an estate agent first, to check you're likely to get the answer you want?

(For the info of non-One Account holders, the rate payable varies according to the level of the "facility" versus the value of the property...so if the property is revalued at a higher value, the interest rate will fall)

Grumpy_Old_Duffer

I took out a One Account about 3 months ago (didn't know these type of Mortgages existed!!)

..... and have stoozed nearly 95% of my Mortgage balance against it, so get the benefits all round i.e. Tax Free and reduce my mortgage period.

payless

There's a lot to be considered ( most talked about already)

My thoughts are rates are currently 5.85 - 6.7% depending on LTV
BUT
assuming you are looking at the offset option there are basic offset deals around below 5.5% ( not just initial discount) on low cost swaps

OK not as flex and no credit for current account interst ( can get a little from other accounts, but not this much)

So for higher LTV's I would question if it stacks up financially

Obviously each to their own- and the flex options may be of greater value to some