one account

stray2k

hi can anyone help,ive been thinking of switching to the one account,ive have 28 years on our mortgage left,we brought the house for £76000 and it is now valued at £90.000,however we borrowed £10.000 back, i have a persnonal loan of £5k,and our incomes are £14000 each a year(£28000)in total,we would be able to leave our income in the account and use a credit card,then pay it off at the end of the month,plus we could afford to put an extra £200 a month in the account(savings) we are currently paying about £530 a month for our mortgage,would switching to the one account reduce our monthly payment,
if anyone can tell me if this account would be any good bearing in mind we could put £200 pounds a month extra in i would be gratefull of your reply thanks lee

wymondham

hi. a few things, you've not mentioned what your current mortgage amount is, also you mentioned you borrowed £10,000 back? - was this for something specific etc and a one-off? - reason for asking is this sort of action might cripple you with this account as it's VERY easy to do..why are you interested in the one account particularly?

Seaxwyn

I'm interested to read replies as I'm attracted to the idea of an offset mortgage when my current fixed rate ends. I've got bumph from NatWest One and have heard that Abbey has a similar deal, but which doesn't involve your current account. Are there lots of such products on the market, are there any catches, and what are the questions to ask before applying?

Gorgeous_George

You need to have a lot of savings or exceptionally high current account balances for 'one' accounts to be of any use. Otherwise, the higher interest rate will wipe out any benefits.

They do advertise them well though. I bought a shiny car once

GG

taxi73

this why the Abbey one works better as you don't have to have any savings and is not linked to the current account so for S/E people who are putting there tax savings away they are earning interest before being took out to pay as well ...think the rate is better on the Abbey 0.49% above base rate for life of the mortgage and totally flexible..are am I wrong?

stray2k

wymondham wrote: »

hi. a few things, you've not mentioned what your current mortgage amount is, also you mentioned you borrowed £10,000 back? - was this for something specific etc and a one-off? - reason for asking is this sort of action might cripple you with this account as it's VERY easy to do..why are you interested in the one account particularly?

hi thanks for replying,my current mortgage owing is now £73.000,and the borrowing was a one off which i never intend on doing again,the reason with me looking into this account as ive been on the one account website,imputed the figures to see how it could benefit me,which the result say my mortgage should only take 15 years to pay off,that almost half the time i have left to pay,and am very scepticle weather this is true,another reason for looking into this is i am looking to start working for myself and thought this account my be of use,but going off the figures i gave earlier in employment,and also putting £200 a month extra in,loans, and current house value would this be a good account to use. thank you lee

Seaxwyn

Hi straytk

You can read about the Abbey flexible mortgage that Taxi73 mentioned above at http://www.abbeyforintermediaries.com/mortgages/mort_flexiplus.html

jamesd

stray2k, their site is misleading because they focus on the interest saved. I could charge you a 100% a year mortgage and get far higher savings to make my mortgage deal look even better than theirs - the higher the interest rate, the greater the interest reduction from overpayments.

What you should look at is the total amount you pay until the mortgage is over. That shows you the true result instead of making high interest rate mortgages look far better than they really are.

With the mortgage amount you have and the overpayments you're contemplating you're not going to save money with a One Account mortgage. You'd need to be looking at overpayments sufficient to repay in a year or two before it has much chance of not being more expensive than deals with a better interest rate.

A flexible mortgage looks like a better choice. Or offset (as opposed to One Account current account mortgage) if you're expecting to be paying in and taking out ten thousand or so every few months. If you're just going to be overpaying with only once a year or less frequent withdrawing of overpayments likely a conventional flexible mortgage with drawdown facility allows that and is cheaper.