hi,
i have been looking for competitive mortgages recently.one of my friends have advised to look into "one account "mortgage which essentially sounds great.they have asked me to switch all my incomings and savings into one account so the interest can be calculated on a daily basis. they claim they can reduce my mortgage period to 11 years instead of 25.is there a catch in this? what is ypur opinion of this "one account" scheme? do you recommend it?

thank you

Offset accounts can be quite amazing if you are disciplined with your money. With the One account any money you have in your savings or current account with them is 'offset' against the interest paid on your mortgage - so in fact it is the same as overpaying.

For example - if you had a £100,000 mortgage - and had salary credits of £3,000 paid into a Current Account, even if there was only £20 left each month (and you increased that by 2% each time you had a salary rise) - you would reduce a 25 year term by 7 years 6 months ... and that virtually by doing nothing. If you saved each month as well - and paid off lump sums - the reduction in term is even more amazing. Have a 'play' on their mortgage calculator with your own figures at: www.oneaccount.com/onev3/calculator/calculator-landing.shtml.

However, the offset market is getting much more competitive - and other Lenders such as Intelligent Finance (part of the Halifax Bank of Scotland group) and Clydesdale Bank have mortgage products with exactly the same concept - so it is really worth shopping around to ensure you are getting the best product for your own circumstances. Within the moneysupermarket 'ask the expert' team most of us have offset accounts - but mostly with different providers.

We would be pleased to explain offsetting in greater detail - and recommend the product that we feel suits you best and arrange your remortgage for you. If you feel this would be useful - either give us a ring on 0845 345 5705 - or drop me an email with yourdetails and I will arrange for a mortgage consultant to contact you.

Thanks for the question.

Louise

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Louise Cuming

louise.cuming AT moneysupermarket.com

0845 345 5705

Would you recommend using a 'cashback' card ( say CapitalOne ) for all purchases and then settling that up when the bill comes through, direct from the OneAccount - therefore making my money work even harder for me??

Hello - and thank you for sharing your idea. It is indeed a really great idea to use a 'cashback' card to ensure you can 'offset' the funds against your mortgage balance until the last possible minute. Of course you should then repay the debt in full, but take advantage of the cashback as well.

Positive tip for the beginning of the week!

Lou

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Louise Cuming

louise.cuming AT moneysupermarket.com

0845 345 5705