The One Account?

jamesd

gawdblesshim, you're a poor candidate for a One Account current account mortgage and will be throwing money away if you use it. You don't have significant money for overpaying and don't have regular payments into and out of your current account that amount to 30%+ of your mortgage. You also look to be taking far more than one or two years to completely clear the mortgage. You do potentially have 25% of the balance to offset with but that does not require a current account mortgage, an offset mortgage is fine.

You should instead look at some of the more competitive current account mortgages or an offset mortgage.

Your plan to stooze is a good one. It just doesn't need such an expensive mortgage deal to do it.

To compare mortgage deals, use the Egg mortgage calculator, make sure that your total monthly payment for all deals including overpayments is the same and compare the total amount paid, not the interest saved.

In the One Account calculators money left over at the end of the month is normally taken to mean "spare" money that you will not spend and can be used to pay off the mortgage. It's treated as regular mortgage overpayments.

The larger facility that teabelly mentions may cost you money, since the One Account interest rate depends on the total facility arranged (how much you're allowed to borrow) not on the current mortgage account balance. The same feature is available on all offset mortgages: you simply borrow say 20k more than you need and immediately put that into the offset account where you can get it if there's an emergency. Pick the amount so it doesn't cost you more interest by ruling out a lower cost mortgage deal.

FreedomGirl

Hi,

Jamesd is giving some good guidance here, I think. I'm also a bit worried to hear that you are already carrying debt on 0% credit cards.

CAMs can work for people who have smaller amounts of spare cash free at the end of the month, but only really for the kind of people that like getting their calculator out and are not scared of working out compound interest (i.e. really getting into the maths of how the mortgage costs are worked out) and have enough motivation (and earn enough) to be able to change their spending. Stoozing is probably better for people who are focussed on the details of the contracts (plus have a good handle on the maths calculations aspects as well).

It's part numbers, part psychology.

HTH

FG

gawdblesshim

Thanks guys I was thinking you might say that. Once the credit card debt is cleared i'll start looking into doing it this way.

Hats off to all the people on this thread who are taking time to help folk out with all this. I salute you!

leeloo1

Hoping someone can advise me - I have read all the posts, but am not great with finances and am still confused!

Our current mortgage is 232,000 (house value around £340,000).
Husband & I earn £3700 pm (after tax) and have around £7000 in savings.
Current mortgage payments are £1500pm (plus £150 op). We usually have around £1000 left in accounts at end of month - sometimes more.

So, if we were disciplined with money (usually quite good) and transferred it all to the one account would this be a good move? I did put our figures into the one account calculator (minus savings) and it said we'd pay off mortgage in 10 years, not 21, but this seems too good to be true.

Any advice would be appreciated!

jamesd

leeloo1, 10 years seems entirely reasonable if you have 1,000 to move into savings or mortgage overpayments every month (that's what the One Account calculator means by left over at the end of the month). But you can do that with lots of mortgages, you don't have to choose one with a very high interest rate to do it. With an estimated repayment time of ten years the One Account isn't a good idea because you'd be paying it's high interest rate for too long.

What is your current mortgage interest rate and overpayment limit? Chances are that you can just overpay on it and pay off faster and at lower cost than with the One Account.

bunking_off

...but remember to be absolutely disciplined about making the overpayment / sweeping the extra into an ISA (I'm guessing that you can be, because despite being "not great" with finances you're overpaying...well done).

Agree with jamesd in you case because (a) loan is 79% of value of house, so you'd be on a higher interest rate tier with the One Account and (b) at those sorts of loans, you're unlikely to be able to stooze a material proportion onto 0% credit cards.

Might be worth looking at the IF/Barclays options though.

smokey77

Hi,

This sounds interesting, is the interest rate variable or fixed?

Thanks

wymondham

variable rate - oops, just realised already answered this on another thread - maybe best continue with this one to keep all these posts together?

jamesd

smokey77, variable interest rate. Typically comparable to the lower end of SVR rates available from other lenders, so it's usually very expensive compared to other current account or offset mortgages. Before signing up for this one, check out some of the alternative current account and offset mortgages that are more competitive.

It might be more interesting than usual at the moment for people after a short term mortgage during the credit troubles.

smokey77

We are 1st time buyers with a deposit of £100,000 (equity from parent's 2nd property), husband is self employed, last years profit £26,000, I am on £27,770 gross, my income goes up the scale every Sept gaining £1,500 usually. Found a house on for £199,999 which is beautiful so would be looking at mortgage of £95,000 (hoping to have an offer accepted). Britannia have a fixed rate at 6.34% for 5 or 10 years. Thanks

From the other thread, I am wondering if it is too risky as my husbands income is variable, sometimes he may not have work for a month, then if he does work he may not be paid for 4-6 weeks after the invoices are put in.