First Direct current account - £1500 min payment

tinkerbell84

tara747 wrote: »

From their website:

1st Account

1st Account does not pay interest on credit balances.

Shame!!!


How do you "offset"? Thanks.

With an offset mortgage.

Should be paying 5.49% on the amount borrowed, but every day they deduct the balance of other linked accounts off the balance owing. So you don't earn interest but you don't pay it on that amount of the mortgage, meaning more of the monthly payment pays the actual mortgage. As I'm not paying interest out of my taxed income, and I'm not paying tax on the interest either, it's the equivalent of 10+% interest :beer:

so, if my mortgage is £200k, and i have £50k in linked accounts i only pay interest on £150k and still have the £50k available should i need it.

it's brilliant.

tara747

Thanks tinkerbell. It does sound like a good set-up you have. As I don't have a mortgage I am doing some offsetting of my own - saving up while house prices fall!



Anyway, since they don't offer interest I will just open it, get my £100 then switch after 6 months.

:T

tinkerbell84

Just get a savings account with them as well and then keep the money in there!

They're a fantastic bank.

tara747

tinkerbell84 wrote: »

Just get a savings account with them as well and then keep the money in there!

They're a fantastic bank.

Hmm, an extra £100 free if I leave though...

tinkerbell84

But why get everything transferred to them to then move it away again?

It's so much hassle!

I got the £100 to join, and now I'm moving my mortgage to them too. I honestly don't think you'll want to leave them in 6 months

YorkshireBoy

tinkerbell84 wrote: »

Should be paying 5.49% on the amount borrowed, but every day they deduct the balance of other linked accounts off the balance owing. So you don't earn interest but you don't pay it on that amount of the mortgage, meaning more of the monthly payment pays the actual mortgage. As I'm not paying interest out of my taxed income, and I'm not paying tax on the interest either, it's the equivalent of 10+% interest

If I 'gross up' 5.49% for a higher rate tax payer I get 5.49% x 100 / 60 = 9.15%.

Could you explain (further) how you get 10%+?

brightonman123

looks like you need to 'pay' your wife £700 a month, for something ..

(services rendered? lol)

tinkerbell84

Can't remember off hand, but I have it at home. I'll get back to ya

tara747

tinkerbell84 wrote: »

But why get everything transferred to them to then move it away again?

It's so much hassle!

I got the £100 to join, and now I'm moving my mortgage to them too. I honestly don't think you'll want to leave them in 6 months

Oh, I won't transfer my DDs etc - just my salary. Then I'll change my salary payment back to my other a/c (which I will leave open) and close the FD account.

No real hassle at all... (famous last words)

Anyone done this?

Turtle

I agree with Tinkerbell. I think you'll find the service is so good you will find the potential stress from other incompetent institutions is not worth trading in the other £100 to close.