Is A One Account/offset Mortgage Right For Me? Help Please!

hawy

hi got told if you got savings best to go for the one account but i dont know?

my details are im a self imployed builder montly income varies
buying a house for £150,000 this october which has a value of £275,000

i have £30,000 in an online saver and in may i will be recieving £40,000 inheritance
this will give me a total of £70,000 to put against my mortgage

am i best to just use this as a deposit or is it better for me to get a one account any help would be great thanks!

MortgageMamma

how long have you been self employed? do you have accounts

hawy

hi no dont have accounts as only started being self employed in feb this year

MortgageMamma

I doubt very much your application will be accepted anyway, as you do not fit their lending criteria due to being self employed for short time with no accounts. You really need to take some professional advice - most high street lenders do not have products that cater for you.

hawy

hi my partner has a regular income of £1000 per month would this help? and are you saying that i will strugle to get a morgage? even with a high deposit? thanks

liitleblackcat

You can probably do the sums yourself. Generally speaking offset mortgages are more expensive than standard repayment mortgages but the gap has reduced in recent years. The savings in the offset provide interest effectively tax free at the mortgage rate whereas savings elsewhere will be taxed. So if the offset mortgage rate is (say) 6%, you would need to get at least 7.6% on your savings if they were in another savings account. Not easy even with banks falling over themselves to have your savings.

The sole advantage of an offset mortgage in my view (and I have one with Yorkshire BS) is that you can have your cake and eat it. You still have instant access to your savings but they act as though you had paid off a great chunk of your mortgage. The savings aren't taxed and the interest on them is the same as the mortgage rate.

The downside is that you may have to pay a higher rate for the mortgage, but it is easy to put money in to the offset when you're flush and to take it out when you're not.

Having said that, the One Account is much more expensive than many other offset mortgages so it's worth looking at best buy tables first.

hawy

thanks for that i will look it to it