Credit reports and the 5% savings loophole

themanfromamarillo

Hi folks, I'm in a situation where I have a bit saved up for a deposit for a flat but due to contract situation I won't be looking to buy for another 2 years. I've looked around and the I've set my sights on opening a number of high interest current accounts (5% savings loophole). I've already got 2 open and would look to open another 4-6 over the next year. I know that I'll need to pace my applications and if I have them open within the next year I won't have a large number of recent applications showing up in two years time. However I know from my Noddle report that my current accounts appear on my credit report.

Does anyone know how mortgage lenders would view a person with a large number of current accounts open? I would be coming in with a >50% deposit

Also has anyone applied for a mortgage while taking advantage of the 5% loophole?

darkidoe

I am guessing the age of the accounts rather than the number of accounts you have will play a bigger factor. It seem you have time on your side, so opening as many current accounts as you can as soon as possible and let them build up their ageiness in the next 2 years. I have opened 5-6 accounts within the last 6 months with no issues. So if your credit history is decent, try opening all the accounts in one go!

phona

I got my first mortgage about 7 months ago. My deposit had been saved in high-interest current accounts; I think I had 5 open at the time of my mortgage application. That's a similar number to what you're talking about.
It was never mentioned in the mortgage process and I didn't have any problem getting good deals. So from that we can speculate that multiple accounts doesn't have a big effect on its own. YMMV.

Something that may be worth keeping in mind is that you have to show where the deposit came from, and that's easier to do if it's in a small number of accounts. I was printing off lots of statements to send in, trying to make sure I hadn't missed any out. It's not ridiculously difficult, but more paperwork to spend your evenings on!