Hi, I'm new to the forums so please be kind to me lol!!
I'm thinking about taking a One Account and am looking to see if anyone can offer any advice, Im wondering if it really is to good to be true and would be grateful if anyone with experience of it could give me some feedback.
Thanks

Right, now this would be the Virgin One account, right? Where you offset your current account against your mortgage (on a daily basis I presume?)? I think these types of accounts are a cracking idea and I hope to get one next time I remortgage.

But I am not an expert. There may be someone here who has experience of these accounts themselves and who give us both the lowdown!!

Cat

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Ah, you need to be careful here.

Offset Mortgage - you have your mortgage account and a LINKED savings account. You recieve no interest on the savings account, but the amount of savings is 'offset' against the mortgage amount and you only pay interest each day on the amount of mortgage not covered by savings. You keep your mortgage payment the same and so your balance drops faster.

The One Account (no longer Virgin branded, it's just a Royal bank of Scotland brand now) does the same, but all in one account - it's like having a terribly overdrawn bank account.

My feeling is that the One Account method has more pitfalls than the separate accounts method.

There are plenty of lenders doing offset accounts. You have to note that the interest arte on all of these accounts is less competitive than standard products.

So, you need a certain (fairly large) level of savings before they save you more interest than they cost you, so they are definately not for everyone.

Hope that helps

Adrian

Ah, Adrian, that helps indeed!

I always thought that these accounts seemed like a cracking idea, but, even as I was typing my reply, I wondered if one of us with better knowledge than I might come and shoot me down (metaphorically-speaking)!! Thanks for that!

Luckily, one of my closest friends is also an IFA, so I won't be led astray when the time comes in about a year!!

How's the weather in sunny Southampton (that is you, right?) I was born in Portsmouth you know but am way up north these days!!

Cat

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Thanks, I was looking at the actual "One account" (the one with the mortgage shrinker adverts!), we don't have a huge amount of savings but the overall cost seems about the same as taking another 2 years fixed rate around 6.45% and i really want an account that you can overpay on without incurring any charges, i would also like to find a lender which i can stick with as the hassle of keep changing every couple of years just incurrs more stress, anyway thanks for the advice
Michelle

Here is a very interesting article.

http://www.thisismoney.co.uk/help-and-advice/advice-banks/article.html?in_advicepage_id=115&in_article_id=394267&in_page_id=90

Thanks, That made very interesting reading!!
Michelle

How about this one?

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=articleFWgroup&value=8704&target=_self&site=pfs

Offset Tracker mortgage

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0.48% above Barclays Bank Base rate, currently 5.25%, which is 5.73% (variable) for the term of the mortgage.
*
The overall cost for comparison is 6.0% APR.
*
Application fee £595.
*
No early repayment charge.

Thanks, I didnt realise there were so many different ones!!

If it's just overpayments you are looking to do, the Woolwich do a lifetime tracker at 5.48 with zero fees and you can overpay whenever you like.

This also means you aren't paying for offset facilities if you aren't going to be offsetting a great deal.

If your mortgage is above £80 or 90000 other rates are worth considering that do have some fees, but lower pay rates.

Adrian

Ah - probably available on the website Derek says. If your mortgage is quite small they also do an offset tracker with a zero fee at about 6%.

Thanks, I will have a look at that one also

Hmmm...
Why not get the lowest varaible rate that allows offsetting?
I'm not sure I know what that is, but 0.48% is not the best.
Hinckley & Rugby for example will give you 0.07% over BoE base rate: much better but with a £200 higher upfront fee
http://www.hrbs.co.uk/index4.htm (click the first option "Lifetime Tracker 4 Mortgage Product")
As far as I can see, if you have a £200k mortgage net of the savings offset, that's 0.41% per year saving over the Barclays deal = £820 each year

For a bit of fun, ask your current account provider...
1. whether they provide an offset mortgage
2. why the rate is worse than a non-offset mortgage
3. whether they will match the rate of say HRBS given above
and
4. whether you will need to fill out tedious forms for your mortgage, given they have a lot of of your personal info on file

The answers will be saddening.

One day, the concept of offsetting will be applied across more products - eg a linked € $ and £ account that charges you/gives you interest according to your aggregate position. Why not already ? Maybe that's question 5 for your current account provider....!

Thanks

Hinckley and Rugby is a good deal if your mortgage is very large or if you have a large amount of savings that you want to offset, but don't want to actually want to use to pay the mortgage off.

It has a £745 arrangement fee and a £199 survey fee. It's at 5.32%

Woolwich has no survey or arrangement fee and is at 5.48%. It doesn't allow offsetting, but does allow repayments at will. In fact, you can subsequently withdraw overpayments as well.

I'd sooner save my £944 in fees and use it to pay off the mortgage.

I am certainly considering the woolwich one as it looks ideal, without having to move all my other accounts, How long would you usually allow for a remortgage (last time it was messed up by the IFA we used and took almost 12mths!!), Our fixed rate is up 1st june so was thinking maybe April would be a good time to start the ball rolling
Thanks again
Michelle