Offsetting (IF, OneAccount, FD)

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I was on a property forum and some people with big mortgages do NOT like IF offset mortgages they are a con and any benefits you get are AFTER you have paid up.

Dunno about Virgin one.

"Benn" wrote

I've been with FirstDirect for over 10 years and had one of their offset mortgages for a while now too. Service is excellent. [They originally pitched themselves as a telephone bank, and all operators are pleasant to speak to and always manage to help. I find their internet banking very useful too - you can do pretty much anything you'd want to with it.] I'd recommend them to anyone.

Well, if you are looking at IF and The One account then stop - their interest rates are 5.8% and 5.70% respectively, compared to Open Plan offset (Woolwich/Barclays) which is 5.6%.

Dunno about FD though - excellent bank mind!

MC

Can you be more specific? This sounds like a blanket criticism.

Rob Graham

"Marcus Collie" wrote

FD = 5.25%.

I've no idea what this means. Offset mortgages are not a con - but you do need to be aware that you pay a premium on the interest rate to gain flexibility and offset advantages. Unless you have sufficient turnover of cash through savings or current accounts it may not be useful to offset (though there are other potential advantages such as retaining ISA allowances after the mortgage is paid off).

Thom

No IF allow credit cards and loans to be offset.

Thom

While having no experience of their mortgage products, my dealings with FD over the years have been without any complaint whatsoever. Only recently, I have been collecting deposit payments for a society meeting next year, and have had some fun matching up bank transfers with people. One in particular was unrecognisable - no name, no account no, no sort code. Just P followed by about 10 digits, which meant nothing to any of the people who might have sent it. I phoned FD and after a couple of minutes they were able to come back and tell me the name of the account holder who had sent it - I was impressed by this at 11pm. He then confirmed by email that he'd been asked for a reference which was then clearly not included in the transaction details.

His bank ? "Intelligent" Finance :-(

I've got a OneAccount. I got it because there was no indemnity insurance (I think that's the right name) for getting a 95% mortgage. This saved me a few 1000 at the start. Then I sold my canal boat and was able to pay off quite a bit of the mortgage with no penalty.

Since then I've got nearly 60,000 on interest free credit cards. As someone pointed out, you get a credit card with the one account so you can credit that with the cash from the "balance transfer". The website is excellent and allows you to set up virtual savings accounts. So if I transfer 5000 from a credit card, I immediatley create a "savings account" for 5000. This way I can be sure not to spend the cash.

But, as I don't have any savings and the credit card deals will dry up, I'm going for a less flexible mortgage as the rates are much lower.

The One account was good at the start for the reasons I've mentioned and they have a good website and service - it's just the high interest rate which is the problem.

Don't forget our friends at EGG either: 5.49% (5.6% APR). Been with them for 5 years and no complaints. Totally flexible mortgage fixed to the base rate (within 1%) & offset too if you wish.

Aris

but the latter is also substantailly less flexible than the One account, so that needs to be included in the comparison. The clue is in the language they use - "overpayment", "take a break", "partial redemption" - these are not the words of a flexible current account mortgage. I'm paying 5.6% on a One account by having a loan facility less than 50% of my valuation - sometihng you can change as you go along.

Phil

"oh no it isn't"

Egg say... " Overpayments, withdrawals and payment breaks Overpay at any time using lump sums of more than £500, or by simply increasing your regular monthly payments without the risk of incurring a penalty. You can then withdraw your overpayments if you need them back (minimum withdrawal £250). Need a break? No problem, you can take a payment break of up to six months every five years if you need to. "

with a One account you can put in any sized lump sum and withdraw all the money in the account up to your agreed limit at any time, none of this "withdraw your overpayments" stuff. You can take a "payment break" (sic) for 10 years as well.

Trust me, Egg is not "totally flexible".

Phil

Totally agree - One Account is totally flexible and runs like clockwork - wouldn't change it and would reccomend it to anyone. L

I think the phrase which covers this is 'current account mortgage' (CAM)

I've never heard of that restriction. When I opened the One account in

Daytona

Hear, hear

I wouldn't recommend it to the financially challenged.

Daytona

It's a FAQ; search the uk.finance archive -

that is still the case, my 10 years was an illustration to comparre with the more restricted products.

As there are no payments the concept of a payment holiday cannot, as you point out, arise.

Phil

I have, never quite got what i wanted unfortunantly.

Cheers