"The One Account"- a bit of advice please!

bunking_off

skintlass wrote: »

The current variable interest rate on the one account is high - I'm moving to a standard fixed rate mortgage and saving 200-250 per month on interest which will go to pay off my mortgage instead.

Yes but that depends how much of your mortgage you leave in the One Account. My balance is notionally around -£30k, but 90% of that is stoozed onto 0% cards / M&S 3.9% life of balance card, so my net interest rate (allowing for balance transfer fees) is approx 3.5%. Every month my "real" One Account balance scrapes towards being above zero as I'm paid, then goes more negative as the month goes on.

That said, if you use the flexibility features of the One Account so little that you can manage within the straitjacket of a conventional mortgage, then you don't really need something so flexible so may be better off with a cheap fixed rate (not a criticism, just statement of fact...if you don't use the flexibility of a flexible mortgage you might as well go down the more conventional route. Think one of the biggest mistakes people make is to take out a One Account then treat it like a normal mortgage).

bdmum1

I definitely feel like I've got my head round this more now, thanks for all the explanations / advice.

Seems safe to say that for the time being at least we just keep throwing everything we've got into the oneaccount until we reach the magic zero figure, and only then should we hunt out the best deals to put any savings into. I think we were panicking a bit in case we could have been making our funds work even harder for us, but with a mortgage rate of 6.85% it seems fairly straightforwward.

As for the stoozing, ooooh that sounds so tempting! I have heard of it before but never really went into it in great detail. I think we've always been a bit nervous of credit cards, having felt we were acquiring a few too many a couple of years ago. We need to get over the feeling that the mortgage is an "OK debt" but credit cards are "bad debt"! But I can definitely see how this would be a logical solution to my "making our money work even harder" question though. It's given us something to think about!

A bit more good news, I've checked the total mortgage balance today and it's actually £53000 rather than £55000, so we're another £2000 closer to our target. For someone who's so obsessed with checking our accounts I don't know how I got that wrong, but £11000 mortgage balance feels fab. Nearly single figures!!!!

Thanks again

2poor4this

Interesting thread and some informed replies, apologies then if this is a daft question as I feel it's already been answered, peace of mind thing

If I open a one account and deposit the full amount outstanding on my mortgage I wont receive any interest on that money but I wont have any repayments to make either so that money can be invested elsewhere.
As long as I have the account open they will hold the deeds to the property at no expense to me.

I like the sound of this is it seems i still have access to my savings should I require them but incurring the interest on the amount I'm now "in debt" if I withdraw any.

I have a 5 year fixed rate ending in about 6 months and I'm looking at my options as I now have the capital to pay it off, is this the best option or are there similar packages out there?

I'm still looking through the forums so please be patient if it sounds like I'm not bothering to do the research myself.

wymondham

2poor4this, all your assumptions are correct as far as i can see, although you would need to open the account and wait a few weeks to put your savings into it as there is a minimum opening balance required to open the account. Seems like it could work well for you.

2poor4this

Thanks for the confirmation, I'm looking into this a bit more now as it seems to be a good route for me to go down.