One Account

DickDastardly_2

My wife and I switched from the dreaded endowment nightmare in 2001 to a Virgin One Account for several reasons: we like the flexibility, we like the good customer service, we like the all-in-one-place idea and we wanted to be able to borrow from ourselves or pay-off our mortgage quicker.

In the 6 years, nearly 7 we have run the account we have made little real headway in paying off the capital BUT it has allowed us to financially cope with our first child, two jobs moves and an area move without ever incurring any debt or external loan.

However, familiarity always breeds contempt, so I am aware enough to look around and ensure i am not being ripped off. Looking at this site there seems to be a bit of a downer on the off-set or all-in-one mortgage - are they that bad then?

I am currently self-employed and it seems very hard to even get quotes from other providers now, so are we better staying with the One account or seriously start looking elsewhere?

We are really keen now to start getting this albatross (mortgage) off of our necks asap, so any advice / views appreciated.

:cool:

Gorgeous_George

Off-set or all-in-one are great for those with money to off-set who need/want the flexibility. subject to your own circumstances, you may be better off with a more mainstream mortgage.

Virgin One Account, IMHO, is pants.



GG

DickDastardly_2

Thanks for the replies so far. Trouble I can see with a 'normal' mortgage is I am self-employed and as such my income is very flexible, which is where the One Account helps.

Why such a downer on it? The whole site seems very anti but I cannot see why?

AlMac, how did you use it regarding debt then? We owe nothing to anyone except the mortgage....

wymondham

DickDastardly wrote: »

Why such a downer on it? The whole site seems very anti but I cannot see why?

often wondered the same thing .... on paper it's poor value, but the way it works is enlightening and quite life changing...... I'd stick with the One Account if you like it's flexibility and don't mind the higher than average interest rate....

21castlehill

I came yery close to taking out a one account mortgage 18 months ago when doing exactly the same as yourself to escape the endowment nightmare. I had cash spare every month & liked the flexibility which should see my mortgage plummit. At the last minute I bottled it as I can't be trusted, I could see myself having paid off a tidy sum then suddenly drawing back all of it to purchase a shiney new car, then its all back to square 1 again.

In the end I took out an 11 year repayment mortgage with First Active fixed for 5 years. Pro's was 4.79% interest against 6.1%, my payments were higher (due to reduced term) so I'm paying off more every month, no drawback facility (so I have to save for the shiney car) & I can still pay off an extra 10% penalty free every year if I have spare cash. Result is my mortgage is now 12K less than it was 18 months ago, I'm on a very good interest rate & on target to have enough saved to completely clear the mortgage at the end of the 5 year deal (if I don't blow that on a car). With my poor self discipline I don't think I'd have payed anything off with the one account. At the end of the day it's whatever fit's your personal circumstances & goals best that wins. For me I'm glad I went with First Active & not the one account.

cm233lh

Look at Intelligent Finance. They do the same as One, but with some decent rates of interest. The SVR is as poor as everywhere, but there are a couple of term tracker rates that make a lot of sense (if you want to be on a variable) and some short term fixed rates. Much more choice than One I think. And a pretty pinky-purple web site to boot!

MortgagesInc

I agree with cm233lh - there are better value offset providers out there - IF, Clydesdale and Woolwich for starters. Offseting can work very well for the right client, and IF have an offset calculator on their website I believe which has an 'effective rate' function - this can show whether it's worth staying with this type of mortgage or switching to something more traditional.

DickDastardly_2

OKay thanks I may have another look around - bit worried about the hassle of switching though!

cm233lh

My switch to IF has been smooth so far, but still waiting on the mortgage, so a can of worms could turn up. I even made a quick buck on the way - they refund your valuation, but you have to pay it up front. I payed it on Capital One 4% cashback - £17.20 for lending them £430 for a couple of months. All my direct debits are done after about 4 weeks and just waiting for the child benefit people to get their act together. Depends how much you're saving and how much avoiding a bit of hassle is worth. I'm going for a lifetime tracker so I don't have to do it all again in 2 years.

jamesd

The negative is the very high interest rate.

The easy transition is to an offset mortgage of say 30,000 more than your current outstanding balance. Put the 30,000 into the offset account and that means you don't pay interest on the 30,000 but it's still available as your flexibility fund. As funds are available, overpay into the offset account and you'll gradually build up a very large flexible sum you can draw on.

skim

I must say I've been with the one account about 7 months now.

Because I'm ahead of payments all I pay each month is interest.

We started off at less than 50% mortgage & had quite a bit of savings on top of that.

Over the last 7 months I've now cleared an extra 20k off my mortgage.
Also I get a large amount of money going in in lumps - thats when it works for you.

I guess there is a small amount of people it'll work for but it certainly works for me.