The One account

Django x2 · 11 Oct 2011 at 12:33

Does anyone here have this or researched it.

It seems to be an excellent way of dealing with mortgages but I gather you have to completely change your financial mindset.

"ooo, lets go on holiday, whack it on the overdraft"

The concept it seems, is that you're mortgage becomes one giant overdraft which any and all spare money reduces. With a joint income of nearly £6k (next year), this is something that can help reduce mortgage term and interest dramatically. A rough calculation I saw reduced my mortgage by 27 years (assuming I was going to stay living here for the next few years which I am).

This raises one question, does anyone know how it works when you want to move house or remortgage?

Phate · 11 Oct 2011 at 12:39

Without serious money management isn't this one way of completely financially screwing yourself over?

Whack it on the overdraft!
Whack it on the overdraft!
Whack it on the overdraft!
Whack it on the overdraft!

Oh crap - I need to remortgage because I've run out

SpeedFreak · 11 Oct 2011 at 12:40

Joint income of 6k?
Reduce mortgage by 27 years?

Are your figures correct?

JeffH · 11 Oct 2011 at 12:45

There are many products that are the same as this such. It's an over-simplified Off-set mortgage with a little more freedom. First Direct have the same but the accounts are split to make viewing them easier. We used to have a One account and it really is as simple as just having one account with a massive overdraft. When you want to move, you have to go through the usual valuation and credit checking processes, but if they all come back ok, they just up your 'overdraft' limit.
We ended up moving to First direct though as the One account was bought out from Virgin by the Bank of Scotland (maybe the Royal one) and the variation of the rate compared to the base rate started fluctuating wildly. They would always follow base rate increases on the same day, but not follow base rate decreases for whole months at a time and in some cases not at all (do a search for complaints about this process from 5 years ago). We were lucky and got on the First Direct version when the rate was a fixed variable compared to the base rate. It's the same idea, but with a current account offsetting the mortgage account. I can swap between the 2 at will and also have a third 'saving' account which offsets the mortgage.

Scrutinize · 11 Oct 2011 at 12:53

Lucero said:
Does anyone here have this or researched it.

It seems to be an excellent way of dealing with mortgages but I gather you have to completely change your financial mindset.

"ooo, lets go on holiday, whack it on the overdraft"

The concept it seems, is that you're mortgage becomes one giant overdraft which any and all spare money reduces. With a joint income of nearly £6k (next year) this is something that can help reduce mortgage term and interest dramatically. A rough calculation I saw reduced my mortgage by 27 years (assuming I was going to stay living here for the next few years which I am).

This raises one question, does anyone know how it works when you want to move house or remortgage?

It is your not you're (you are)

£6k per month or £60k per annum although virtually the same result lol?

Is this the plan so you can buy the new 5 series?

Django x2 · 11 Oct 2011 at 12:58

SpeedFreak said:
Joint income of 6k?
Reduce mortgage by 27 years?

Are your figures correct?

£6k per month, more the year after.

Scrutinize said:
It is your not you're (you are)

£6k per month or £60k per annum although virtually the same result lol?

Is this the plan so you can buy the new 5 series?

yeah, LOL @ my grammarz

I see the risk, which is why you need to reasses how you see / deal with money, especially savings.

Mercenary Keyboard Warrior · 11 Oct 2011 at 18:46

Brill idea and one I am looking at myself

As posted above there were massive complaints about the One account after they repeatedly failed to put down the rate. People were quoting virgin literature etc but after it was sold the terms seemed to be changed, although they were inferred by the literature and not specifically conditions.

If you can get one that definately links to the bank base rate and you have some financial savvy they can literally take years off your mortgage with absolutely no effort at all.

Reginald · 11 Oct 2011 at 18:53

My parents have this and used it for their mortgage. It works really well. The only thing is - if you look at it like a giant overdraft you'll end up paying a fortune for borrowing money as the interest will still be calculated on what you owe

Django x2 · 11 Oct 2011 at 18:56

This is true, but the rate is the same whether you choose to pay of a credit card, buy a car or go on a luxury holiday.

Bear · 11 Oct 2011 at 20:24

Its moveable just like any other mortgage. We use the First Direct version like JeffH aswell and it works out really well. Our savings knocks off a large lump off the interest and therefore works harder for you compared to a normal savings account

uvarvu · 11 Oct 2011 at 20:39

Phate said:
Without serious money management isn't this one way of completely financially screwing yourself over?

Whack it on the overdraft!
Whack it on the overdraft!
Whack it on the overdraft!
Whack it on the overdraft!

Oh crap - I need to remortgage because I've run out

Er...no.

You can drop your cap down as you pay your mortgage off. I keep a 10k buffer between my balance and my cap. The interest rates are set in bands depending on how much you owe so that's another incentive to get you to pay off your mortgage sooner rather than later.

My views on saving money have changed now that I have this account. All of my savings accounts are gone, everything gets paid in to this instead. I won't start saving money again until my mortgage has been paid off.

Django x2 · 11 Oct 2011 at 21:58

Bear said:
Its moveable just like any other mortgage. We use the First Direct version like JeffH aswell and it works out really well. Our savings knocks off a large lump off the interest and therefore works harder for you compared to a normal savings account

It's not quite the same is it? This doesn't use savings, unless you want it to. It uses basically whatever money is in your account that isn't allocated to other things. (plus the actual effective mortgage payment). So say one month, all of our salary is spent, bar £100, then we've overpaid by £100. If the next month, we have £2k spare, then thats effectively overpaid too.

For me I'd see it like a game, how to reduce the -£160k overdraft as quickly as possible!

Bear · 12 Oct 2011 at 13:01

Lucero said:
It's not quite the same is it? This doesn't use savings, unless you want it to. It uses basically whatever money is in your account that isn't allocated to other things. (plus the actual effective mortgage payment). So say one month, all of our salary is spent, bar £100, then we've overpaid by £100. If the next month, we have £2k spare, then thats effectively overpaid too.

For me I'd see it like a game, how to reduce the -£160k overdraft as quickly as possible!

Sorry I forgot to add that the mortgage is your limit and you can run it all as your standard account and that your mortgage value is your draw down limit and you can do what ever you want with it so long as it is paid off within the mortgage term. As you say, you can both use it as your main account and the inerest is calculated daily.