One Account and similar

jonnelson

Are accounts like the one account etc really worth having? Is there any spreadsheet to help calculate savings that that I'd make?

I still owe about 70K, have 7K on other debts and 5K savings.

Thanks,

Jon.

wymondham

All hinges on what you want from a mortgage. If you want a flexible one in the extreme then yes, if you want a cheap mortgage then no. Some people love the One Account (count me in!), others don't like it mainly due to the uncompetitive mortgage rate. If you have any One Accoutn queries I'll do my best to help!

Joto_2

If you read the sticky on offset mortgages you'll probably find all of your queries answered.
I know I had a lot of questions regarding this type of mortgage against a standard mortgage this morning and I've been slowly ploughing my way through the questions and answers on there.
Thanks to everyone who posted I'm a lot wiser about which way to go.

cupofassam

I'm not a fan of these accounts because I can do better myself, simply by overpaying regularly on a mortgage with a lower rate. I did the calculations and it works out a better deal. Bank account mortgages are a good idea in that they get people to recognise the elephant in the room that is mortgage debt, and the ability that we all have to get rid of it more quickly than we otherwise might. But once we realise that, we can take matters into our own hands.

As for spreadsheets - I'm not aware of any, and suspect there aren't any because of the difficulty of comparing a mortgage on which interest is paid monthly, say, with one where it is calculated daily (as with the One account). With daily calculated, you save more money by paying in twice a month (rather than simply adding a sum to overpay to your regularpayment) but with a monthly calculated one, that doesn't work. And you have to be a really obessive saver to know that and work that system.

However. The one account will let you calculate your savings with an on-line calculator. Others do too. These are of course guesstimates because they rely upon a stable interest rate over a long period to make their calculations - which ain't gonna happen in the real world - but they're the best we have to go on. You could compare this sum, and the 'true cost' with the 'true cost' calculated on a cheaper rate mortgage you might find using moneyextra.com, for example. If that cheaper rate mortgage then permits overpayments and/or capital payments, you're quids in taking it. You just have to commit to making overpayments for it to work - and remember, an overpayment is a tax-free saving, and the 'interest' you earn on it is the interest you now do not have to pay.

If you really need the money you have overpaid, most motages let you take payment break to recoup it. But you should only ever do that in an emergency, not for holidays and stuff, as that just negates teh whole saving point.

Rick62

Their online calculator does not compare like to like, so the results look fantastic but make assumtions that you did not mean to make.

In your situation you should be focusing on getting the best rate then getting rid of your debts.

For those that think OneAccount is good you are usually better off with an Offset, usually Standard Life or Intelligent Finance have the better deals.

Gorgeous_George

All depends on how your cash savings/debts are spread. If you have an extremely large sum in your current account or pay a hideous rate in overdraft charges or on a credit card, the OneAccount can be useful.

For the large majority of people, the OneAccount is poor and an off-set mortgage is far better. Maybe Martin could add an approved calculator to show which is the best mortage.



GG

jonnelson

Thanks folks.

raq

i agree with gorgeous george.

Great for my friend who has just moved over to oneaccount as she is very fortunate she can offset up to £1k a month against this as well as her mortgage and also stillhave savings. If she continues she willfinish her mortgage off by the time she's 43 she's only 32 now.

It certainly wouldn't work for us.