The One Account?

jamesd

For the One Account you can choose to have an automatically reducing mortgage facility or not. I think you can swap between them at any time. The One Account people are entirely happy for you to leave it at a high level because your interest rate is based on the facility amount, not the outstanding loan amount.

If your property value has increased, do check out whether you can reduce your loan to value and interest rate band by getting a new valuation done. They will charge a few hundred Pounds for the new valuation.

bunking_off

Good advice on Jamesd's part...we did that a few years ago and knocked a few percentage points off our rate.

(actually we went for a full structural...it was a new build house, approaching 2 years old, so it served our purposes to have a report about all the things wrong with the property to beat the developer up with - getting the mortgage rate reduced was a bonus!)

Hobo_2

ixwood wrote: »

First Direct are doing some pretty good offset fixed deals at the moment:

http://www.firstdirect.com/mortgages/rates.shtml

The 10 year one looks good to me. You'd save a packet over trackers, unless IR's were 4.5% for the next 10 years.

Yes ixwood, thanks looked @ FD
Only financial product ( current account 3 yr ago) i have ever been turned down for !
Have funds well above their earning multiple x3.5 for me to offset (barclays x5)
Do not fancy the 10 yr tie in.
Barclays do not (& IF)do not require auto overpay/capital of interest saved by offsetting, most others do.

kezzamc

i am v.curious about this oneaccount..

currently with northern rock .. sadly..worryingly on a 125% mortgage ..
fixed rate 5 years
just under 4 years to go with them
bought the house for £108,500
similar houses currently selling at around £114,000

teacher and electrician earning jointly (before tax) £50K

was wondering whether it might be possible and sensible to try and move to a oneaccount?

wymondham

kezzamc wrote: »

i am v.curious about this oneaccount..

currently with northern rock .. sadly..worryingly on a 125% mortgage ..
fixed rate 5 years
just under 4 years to go with them
bought the house for £108,500
similar houses currently selling at around £114,000

teacher and electrician earning jointly (before tax) £50K

was wondering whether it might be possible and sensible to try and move to a oneaccount?

depends really on the following:

how careful are you with money?
do you have sizeable savings?
how much 'spare' do you have each month?
will you get caught for an exit fee if you leave Northern Rock?

once you think about these, you'll know if it's right for you if you've read this thread...

jamesd

kezzamc, it sounds as though it would be an expensive mistake. The normal interest rates you'd be paying at the One Account are close to the SVRs that are making people coming to the end of their Northern Rock deals unhappy.

Sit tight, invest or save your money, and wait until either the end of your deal or until you can get one that's clearly a cheaper interest rate. There's no prospect of your income letting you pay the mortgage off fast enough for the One Account to be a benefit to you at the moment. It's likely to take you ten years to pay off the mortgage even if you could overpay by 10,000 a year.

Do keep your eye out for cheaper rates later this year. You might then consider telling Northern Rock that you're willing to leave early if they waive their ERC. Since yours is probably one of the most painful deals they have on their books (fixed rate wll below the current cost of money, so they lose money for as long as you have it) they may be willing.

Use the Egg mortgage calculator and put in the numbers for the One Account and other deals and see how much more the total payable is with the One Account than the others.

gawdblesshim

Lets say you get an offset mortgage at 6%. What if you took out £5000 borrowings on credit cards which gave 0% over a year, and withdraw that £5000 into your offset mortgage savings account? You would pay your credit card company about 3% for the transfer, but that £5000 would have been costing you 6% on your mortgage. Since the savings in your offset mortgage can be accessed at any time, you could take that 5 grand back out after 12 months to clear the credit card and start again- hopefully(!) saving a few hundred quid.

Would that work? Im really just opening my mouth and letting my belly rumble here.

jamesd

Yes, that works fine and is profitable. Well worth doing.

Don't forget regular saver accounts if you or a spouse aren't tax payers. With rates over 7% before tax you can make more money from them than by offsetting the mortgage if you're not paying tax.

dredwing

Well, my application with the One Account is now well under way, so far all is going very well, they seem to be thorough and easy to deal with. One thing though, is there anyone out there with a One Account who would like to have recommended me for the £150 cash back for recommending a friend? ;o)

Send me a pm if you fancy some easy money.

Again thanks for all those who have given advice, I will continue to post with progress/issues/problems etc.

Richardn

PM Sent

Cheers