Discussion in 'General Chat' started by Stuart Wright, Aug 2, 2006.
Can anyone with a oneaccount share their opinions?
One of my old bosses had one and he raved about it.
He said the customer service was second to none, and it was really easy to switch, I am currently thinking of doing the same either with Virgin or the Halifax.
I have the First Direct equivalent, and it's great. It helped me finance a new business venture, and the interest on the extra income that the business brought in was offset against my mortgage. The net result is that my mortgage (which had 10 years to run when I started) will now probably be paid off in 6 years, which is in 3 years time.
Of course, it really only works if you have a reasonable amount of money deposited at any one time, and a mortgage, of course.
The One account is certainly good in theory, combining your current account and mortgage in one; however - as a bank manager - I have found that the interest rate can be bettered (ranges from 5.7%-6.00%). With an Offset mortgage from the RBS, - discounted rate at the moment of circa 5.1% - you can gain the same benefits. Effectively you would have a mortgage account, a linked current account, and up to 3 linked savings accounts; any credit balances on the current & savings accounts would offset the amount of interest charged on the mortgage account. Extremely flexible in that you can make lump-sum payments, take payment breaks, and borrow more as and when required. The RBS Offset also allows you to offset business accounts - however these need to be in the name of a sole trader or simple partnership (ie husband and wife), as opposed to a limited company; also you can either have a business offset or a personal offset - but not both.
With any 'offset' mortgage, there are massive savings to be made if you do have savings or fairly substantial credit balances in current accounts.
I have one and it is fantastic. It does only work if you have more money coming in than going out, but all the same, it has worked for me.
just switched to the basic "oneaccount" last week.
Didn't want to go the whole hog and combine everything in the one account (i/e wages, mortgage, savings etc) , but i intend to overpay my mortgage by £200/£250 a month and it reduces my mortgage term from 21 years to 8 years 8 months!! if i continue to pay the overpayments.
Also you can borrow back the money you have overpaid etc if needed. I remortgage and borrowed an extra couple of thousand to fit a new kitchen so it's very flexible.
1yr fixed @ 4.99% then up to 5.49% thereafter - no tie ins, free legals, free valuation etc - it was a no brainer for me personally.
Has anyone been able to hug Orangutans in some Asian jungle as a result of opening an account with them?
Switching to any bank is easy now because of the new procedures they have. You just inform your new bank of all your old account info and they transfer it all for you.
I use First Direct and ING for savings. I'm happy enough.
I didn't know the Halifax did this kind of account, the last time I looked I couldn't find any information about it
According to my friend they do, I have not personally looked.
Is one of the potential problems of these accounts that if you are not disciplined you never get your mortgage paid off ?
I have heard from some people that they have 'dipped into it' to borrow money, essentially adding it back on to the mortgage.
not really - if i pay the exact monthly premium each month and do nothing else it's just the same as a normal capital & repayment mortgage.
everytime you borrow more you obviously have to pay more on a monthly basis to cover the extra borrowing.
Also the upper limit of the "extra allowable borrowing " comes down each year. So therefore you must repay and stay below the "safety limit" each year. (think that makes sense!)
Most banks have a minimum repayment figure to ensure that the mortgage is paid within the agreed period. I suppose you could abuse this form of credit if you wanted - just the same as you can abuse other forms.
yes I see what you mean. I suppose as long as the minimum floats with the borrowing I can see how that can work well.
So you can over-pay when you want, but can't seriously under-pay
looks like my anecdotal evidence was wrong !
Not sure if it's what your friend meant, but Halifax own IF, who do offset mortages linked to savings and current account (and credit card balances).
I had an IF mortgage - the customer service phone lines were terrible (up to an hour on hold before speaking to anyone) but the actual people were pretty good.
As someone mentioned the offset mortgage interest rates aren't the best. I think you need to have about 50-70% of your mortgage offset in order to benefit, depending on what tax bracket you're in - the more tax you pay the less offsetting you need to make a profit.
Personally I think you have to go quite a way to beat Northern Rock - we are with them now. They offer a 15 year fixed rate mortgage at 5.2% (it was 4.8% when we took it out). Unlike most fixed-rate mortgages though you can overpay as much as you like as long as you don't clear the balance. It was perfect for us as we maxed-out on what we could afford and would be hit hard by any interest rate rises. We are paying it off at a 25-year rate, but we're building a contingency fund in case interest rates go skyward so we can pay it off at the end of the 15 years.
No idea about the oneaccount though I'm afraid.
No - normally you can only dip-in to what you have over-paid. If you want to increase the amount you are borrowing you would have to re-mortgage.
Im beginning to think that they have done that. and maybe the oneaccount makes it easier to borrow more against your house (add to mortgage)
Glad i got mine fixed for one year!!! Interest rates up 0.25% today!!
Actually my question should have been more general - Current Account Mortgages rather than the Oneaccount since there are better interest rate deals from other lenders.
generally - yes they do work if you have either lump sums, or additional monthly income left over at the end of the month, then they can be quite useful.
Also if you have savings etc you can lump in, then this can have a big effect on the term of the mortgage.
I know you said not the one account but try the calculator on their page and play about with the figures and see if it works for you.
You have to take these calculators with a pinch of salt since the amount 'saved' they show you is the interest you save by ofsetting the money at their interest rate - not the amount you save compared to having a standard mortgage. The higher their offsetting mortgage intererst rate the more you 'save' .
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