One account??

Discussion in 'General Chat' started by ketank, Apr 23, 2007.

  1. ketank

    ketank
    Guest

    Products Owned:
    0
    Products Wanted:
    0
    Ratings:
    +0
    Hello.

    Anyone here got one account from Virgin?

    Would appreciate any opinions.

    I Was WELL impressed by the mortgage shrinker and thinking of switching...

    Thanks
    K
     
  2. Achy

    Achy
    Active Member

    Joined:
    Oct 23, 2002
    Messages:
    297
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    28
    Ratings:
    +30
    I've got one.... I think it's great.

    The interest rates are not as good as some especially as interest rates **might** be on the rise, you could get a low fixed rate..... but I find the fact that everything is one place, savings, current account, spendings makes it very easy to see where I am.

    There are other 'funny' offset accounts where you have a current, savings and mortgage and you transfer between the three... :confused:

    I do think you need to be disciplined with your spending though, otherwise you think you've got loads of 'extra' cash but it's actually your paid off mortgage you're spending :rotfl:

    My Top Tip
    Any savings you've got... unless you get a better rate than your mortgage rate (i.e. 6.5%ish) stick them in your One Account.

    Oh if you've got a friend who's got one get them to recommend you and you both get £125.... and if you want a 'friend' to recommend you I will - PM me for details :smashin:
     
  3. ketank

    ketank
    Guest

    Products Owned:
    0
    Products Wanted:
    0
    Ratings:
    +0
    Hey Achy,

    Thanks for reply,

    Thanks for the “Recommend a friend” defiantly worth doing with the £125 cask back, I’m already committed to a 2 year mortgage which it due to finish at the end of the year so if I will switch, it won’t be till then.

    If I can just ask: how does it work?

    Say per month me & my partner get paid: £3000 combined
    Bills and other out going: £1500
    Leaving us with (saving) £1500

    So now 2 questions:
    1. I leave £1500 in the account, how and when is that taken as payment to offset the mortgage?
    2. For one month I leave £1000 rather than £1500 what would happen?
    3. How easy do you find it manage the account in terms of knowing how much money is coming in, going out, saving etc

    Also you raised an interesting point:
    “The interest rates are not as good as some especially as interest rates **might** be on the rise, you could get a low fixed rate…”
    Iam I correct in thinking the main advantage for this account is to pay off your mortgage FASTER resulting in saving the overall interest.?

    Rgds
    Ketan
     
  4. Squiffy

    Squiffy
    Distinguished Member

    Joined:
    May 23, 2002
    Messages:
    13,985
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Ashford, Kent
    Ratings:
    +6,885
    They are a good idea, but the application process isn't very good.

    We applied a couple of months back, but got turned down for "not documenting everything that appeared in the credit search on the application form". I asked them to let me know more, but they never got back and the application ended there.

    In the end we went with Halifax who said our credit rating was so good that we didn't even need to provide proof of income. (And I did check it with Experian, and our credit rating was 999/1000).

    We also had some friends who had a One Account and moved house. They were told it was all fine on their existing account and they didn't need to re-apply, but when it came time to do the deal, they were then told they'd need to apply as per a new customer. They were deeply unimpressed with the customer service.
     
  5. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    I often see people come on here who have been amazed by the 'look how much you reduce your mortgage calculation by!!!' sites and want to switch. The reality is it's nowhere near that clear cut, as they use some very dubious maths to arrive at that figure.

    The main problem is that their interest rates are *high*. They are quoting 6.45% at the moment - you can get a 15 year fixed-rate mortgage at 5.65% right now - so you are paying 0.8% extra before you start - that's 800 quid a year on a 100K mortgage. Plus that 6.45% is only going to go up as interest rates go up.

    Plus, you can get a flexi-fixed mortgage at the 5.65% from Northern Rock which lets you *over-pay without penalty and draw it back out later*. To me this totally blows the one-account and other similar ones out of the water, as they are charging a premium of nearly 1% to allow this.

    As a concrete example, let's say you have a 100K mortgage. That's £537 a month interest with the One, and £470 with Northern Rock. That means you need to have over £1000 permanantly offsetting just to break even!

    You can easily set up a standing-order to overpay your spare salary into a fixed-rate mortgage.

    The only time you should consider this type of mortgage (IMHO) is if you can say yes to:

    - Are you a high rate tax-payer?
    - Have you filled all your ISA allowance?
    - Do you have a *large* amount of cash savings approaching 50% of the property value?
    - Do you really really need the flexibilty of having your mortgage available to spend at any time? Is one-two week's notice not good enough?

    If the answer to any of those is No then you are probably better off with a 'normal' mortgage.

    Sorry to go on a bit there, but I get cross with the banks that advertise these using very unclear maths.

    Feel free to throw any questions back my way.
     
  6. Achy

    Achy
    Active Member

    Joined:
    Oct 23, 2002
    Messages:
    297
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    28
    Ratings:
    +30
    None of your money is taken from your account....

    A simple view is as follows...

    Lets say in month 1 your mortgage is 100K... your monthly repayment would be £541.

    At the end of month 2 you have an 'extra' £1500 in your account so your mortgage that month is for 98,500, so your repayment that month will be is £533

    You still have that 'extra' £1500 but its just reducing your mortgage... if you spend it then your mortgage would go back up again.

    Your mortgage would reduce by £1000 rather than £1500

    I know how much money is coming in.... my salary and I just look at my direct debits to see whats coming out...
    You have to 'forget' the idea of having savings.

    This is how it's presented (using the 100K mortgage as an example)

    Mortagage = 100,000
    Current Balance = -78,000

    Available Money to me = 22,000
    That 22,000 would basically be any savings... so I could also say that I *actually* have a mortgage for 78,000 and not 100,000

    Ummm... I guess... I think one of the main advantages is that it basically allows you to overpay your mortgage and if you don't spend all your money each month then it helps to reduce your monthly repayments.
     
  7. Squiffy

    Squiffy
    Distinguished Member

    Joined:
    May 23, 2002
    Messages:
    13,985
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Ashford, Kent
    Ratings:
    +6,885
    If you had borrowed £150k, then at the moment your salaries are paid in you account would show you owing £147k, and you would only pay interest on that amount.

    Over the month your outgoings would leave the account, and you'd end up with £148.5k. Obviously the later in the month those outgoings leave, the lower the amount you are paying mortgage interest. This alone can knock months off your mortgage.

    The more you leave in each month, the less interest you pay and the quicker you repay your capital. It is more tax efficient than savings, and it is a relatively cheap source of borrowing if you do need to take out any money for outgoings.

    They are a good product, but as I've said the customer service and application process leave something to be desired.
     
  8. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    Yes - so using that example:

    One account: £78,000 * 6.45% = £5,031 per year interest
    Flexi-Fixed: £80,000 * 5.65% = £4,520 per year. (assuming 20K paid into mortgage to drawn out later)

    So that's 500 quid a year *extra* being paid with an offset-type account.
     
  9. Achy

    Achy
    Active Member

    Joined:
    Oct 23, 2002
    Messages:
    297
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    28
    Ratings:
    +30
    Dont forget to factor in that any spare cash in a month reduces your repayments....

    I think it's these little bits that all add up.
     
  10. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    Again, I don't think they are going to push the account to a point where you are better off with a one-account. e.g. say you have 250 a month spare - you could put that into an EGG ISA at 6.05% and be saving at a higher rate of interest than you are paying on a mortgage at 5.65%!

    I really do urge people with offset accounts to do the maths, as the banks are very good at making people think they will automatically be better off.
     
  11. Achy

    Achy
    Active Member

    Joined:
    Oct 23, 2002
    Messages:
    297
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    28
    Ratings:
    +30
    Or you could keep the 250 a month spare in your one account and get 6.45% tax free by offsetting it against your 6.45% mortgage !? Thats why it's good...

    Where else can I get a 6.45% Tax Free saving rate?
     
  12. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    That's the basic falacy I'm afraid - you're only getting 6.45% tax free because their interest rates are so rubbish! Watch:

    One account: 100K mortgage at 6.45% = 537 per month interest
    Offset 250 quid saves you £1.34, bringing the payment down to 535 (being generous)


    Northern Rock & Egg (say): 100K mortgage at 5.65% = 470 per month
    Stick 250 quid in an ISA at 6% = £1.25 - total payment 469

    Therefore you are 66 pounds a month worse off by offsetting.
     
  13. Mr_Wistles

    Mr_Wistles
    Distinguished Member

    Joined:
    Mar 11, 2004
    Messages:
    12,109
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Essex
    Ratings:
    +3,035
    I think imightbewrong mayberight.
     
  14. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    Thanks Russell. This quote from Achy is what makes me really cross with the banks - they have convinced people that this is what they are getting, but it is total nonsence.

    For example, I could set up an offset mortgage and charge people 20% interest, then they would say 'hey - I could get 20% tax-free interest on my savings - I'm off to the bank of imightbewrong' all while I'm rubbing my hands with glee as they flock in.
     
  15. Achy

    Achy
    Active Member

    Joined:
    Oct 23, 2002
    Messages:
    297
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    28
    Ratings:
    +30
    I also think imightbewrong mayberight and that imightbewronginstead ;)

    So I thought about remortgaging...

    I did go and look at Northen Rocks website though.... :confused:

    Where is the info on flexi-fixed mortgages ?
    Where is the info on their interest rates ?

    :confused:
     
  16. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    Their website is a bit poor. This page describes flexibility, which applies to all/most of their fixed-rate mortgages:

    http://www.northernrock.co.uk/mortgages/flexibility.asp

    To get to their interst rates you have to do the dance through the 'choosing your mortgage' section - linked from the main Mortgages page. Be sure to write down any of the numbers, as you can't get to the rates without going through the questions (if you figure out how to let me know).

    BTW, when I said there's no overpayment penalties, that's true as long as you leave at least one pound in the mortgage. If you pay it off completely you before the end of the fixed period you will be hit with a (very large) charge.
     
  17. ketank

    ketank
    Guest

    Products Owned:
    0
    Products Wanted:
    0
    Ratings:
    +0
    Thanks for this important piece of information; I have been looking into this northern rock flexibility mortgage. There is so much to know!!:suicide:

    So much misconception out there!!:mad:

    My main concern with the current state is I have more extra cash that i could be using to pay off the mortgage faster but don’t know how to go about doing this...

    Thanks all

    K.
     
  18. imightbewrong

    imightbewrong
    Distinguished Member

    Joined:
    Dec 6, 2005
    Messages:
    53,909
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    167
    Location:
    Romford-ish
    Ratings:
    +34,778
    Exactly. It makes me :mad: when I see people who have essentially been conned into thinking they are better off, when they are actually worse off.

    I don't think you can beat the Northen Rock mortgage - you overpay whenever and whatever you like. Some mortgages limit you to 10% a year, although that's probably enough for most.

    We got one last year and are now paying 4.89% fixed for 15 years, and have used overpayments to bring the actual mortgage down from 25 years to 15 years. We'd be nowhere near this with a one-account type product.
     
  19. ketank

    ketank
    Guest

    Products Owned:
    0
    Products Wanted:
    0
    Ratings:
    +0

    WOW!!!

    You have been a great help here. Thanks very much.

    I finish my fixed 2year in Dec07. cant wait to change!.
     

Share This Page

Loading...