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Thinking of switching our flexible mortgage for a Virgin One style account - any experience?(24 Posts)
We took out our current mortgage with the Legal and General 6 years ago. Northern Rock have since taken it over, and the service has gradually worsened (removed snazzy bits of internet site that let you do all sorts of projections, have now removed ALL internet access to the account, and when we request money out of the account, they often forget to process our request, sometimes leaving us open to overdraft charges or fines from the Inland Revenue (as withdrawals are usually to pay the taxman)).
We are therefore considering changing accounts. I am fine with the concept of all the money being in one place, but tbh really can't be bothered with the hassle of changing our bank account, which we've had with the Abbey for donkeys.
I guess I'm looking for general advice or experience, and answers to the following specific questions..
1. Where can I find out the interest rates for the last, say, 2 years for all accounts that I'm considering, so that I can compare how they have been doing with our current mortgage?
2. If we go for a Virgin One, can we still keep our existing bank account, and perhaps gradually move more and more of our standard payments over?
3. Who else offers something like the Virgin One?
Don't all rush to tell me your experience at once now .
I really think the offsetting saves a lot of money and it is worth the hassle of changing your bank account. The money is in one place, but there is a mortgage pot and a current account pot and however many pots of whatever name you would like to have. So it is sort of separate, but still offset. It can be more worthwhile than an ISA, depending on rates.
Why are you so loyal to Abbey - I bet they are making a packet out of your money! Any bit of money that comes into an offset account is immediately offset and saves mortgage interest at whatever rate you are paying. A normal current account does not come close to this!
Only thing is that you'll need to pay to get it set up. ie changing mortgage company will mean that your house will need a valuation survey done and this will probably cost you.
We had an offset mortgage and account with first direct and I have to say we found them wonderful, and we saved loads of money. Are now in France and wish we had something like that here.
we have a flexible current account mortgage with the Royal bank of Scotland, and it's fantastic. Can't answer your question about the rates, but we have internet access, and can keep very close eye on our money.
We don't have separate "pots", just one account for all our money, so it currently looks as if we are £190,000 overdrawn , but they tell us every month how far ahead or behind of our plan we are, so can easily keep track of things. The best part of it has been that we can spend money up to the maximum amount we are allowed to borrow, without requesting a loan, and it is the same rate as the mortgage. So when dh needed a new car, we were able to pay with Switch, and not wait for clearance of a cheque! probably not the best account for an impulse buyer, but good for us, as we're pretty careful (read tight!)
I have a oneaccount, it is quite expensive when compared to similar products but has always worked well for us. Our mortgage is quite small and I usually manage to keep half of it on 0% credit cards. I like knowing exactly how much debt I have and being able to buy anything I want without having to arrange loans etc. The internet banking used to be quite poor but they have improved the service hugely in the last year.
tissy - we used to have that and we found it brilliant too. I want to go back to that as soon as we can. When we moved last year, they wouldn't lend us the amount we needed (totally ridiculous really as they'd seen how we'd managed our account - paid about £20K off it in 2 years) so we had to go for a fixed rate with Northern Rock.
Can't wait to go back to the current account one.
Because dh is commission based and I'm self employed, the current account mortgage was fab. Because we were never near our limit, it didn't matter if we had a lower pay month as we just ate into the reserve (needing no permission to do so) and then it would get 'paid off' again with a better pay packet the following month.
The way we have it now with a normal current account and a normal mortgage is a bloody nightmare. Always having to watch that we don't go into the red and if a big bill comes up trying to make sure we covered it. We are so much better off now, income wise, than we were a couple of years ago when we had the current account mortgage but have to monitor the account and think so far forward to upcoming big outgoings - we never had to do that before.
BUT, I'm not sure RBS offer the current account mortgage now - I think you can have an offset where you have different accounts but i think the one we had, and tissy has, is miles better.
Ooh some responses - thanks ladies, as I know it's not the most interesting subject in the world!
crokky - I'm not really sure why we are so loyal to Abbey, especially since firefox (our browser of choice) isn't supported by their internet site. I guess it's mostly because dh has had the account since before we even met, and he's a bit of a luddite when it comes to all things financial . I think it's more the hassle of telling everybody that we've changed, and having to re-set up all of our standing orders etc that puts me off moving.
I will emphasise that we are no strangers to the concept of putting money in the mortgage account rather than the current account. DH (and I until I had dd) is self-employed, and currently earning very well, so we bung lump sums into the mortgage account on a regular basis, and overpay the interest (it's an interest only account) by at least £1k each month. We then draw out large amounts twice a year to pay income tax.
pigleto - you are saying that the interest rate is high on the One account? Do you know off the top of your head what your current rate is?
So so far we have RBS and first direct worth looking at.
Ah, cross posted with your second post - so RBS might not be a goer. Noted.
According to their website, the flexible choice mortgage is still available to remortgagers.
Definitely worth a look.
Just had a look at RBS' flexible choice mortgage, but there's no mention of it being a single account. It reads just like the flexible mortgage that we have already. Is this def the one that you have tissy?
Flexible choice is the one we have. It's not the same as Offset Flexible mortgage
Sorry tissy, but I think I'm still missing something here! This is the info that I've found on the flexible choice mortgage, but in your original post you say that yours is a single account which 'looks' like you're very overdrawn.
The info on that link makes absolutely no mention of it being that sort of account at all - just reads like a regular flexible mortgage.
Maybe they've kept the same name for it, but changed what the account actually is for people taking it out now?
oneaccount is currently charging 6.85%, if you did fancy it get someone to refer you as they do incentives.
I think we might be a bit more complicated than most remortgagers, as we might actually go into credit for a while at some point in the next couple of years (but will need the money back out to then pay the evil taxman), and the First Direct one charges you for repaying the mortgage, and doesn't pay any interest when you are in credit.
Am starting to think that maybe we need an IFA or something similar, but they charge for their services don't they?
Will bear you in mind if we go for the One Account pigleto .
Have a look at the Woolwich Offset acount. As an IFA it is one I tend to recommend the most as it is simple and the monthly statement is easy to understand. You can also set up 12 saving pots which can be used to offset against your mortgage. Additionally you can use their web site to check your account on line etc.
Have a llok at this page for offset details
Find an a IFA here who should be able to advise and let them know you do not want to pay a fee. www.unbiased.co.uk/?WT.mc_t=PPC&WT.mc_n=Google&WT.srch=1
Thanks BGD. I think I'll try and talk to Woolwich (now part of Barclays I assume?) and Virgin this week, and see what they each have to offer, and then follow up with an IFA if I don't seem to be getting anywhere. Quite like the idea of the 'savings pots' now I think about it more, as we could set aside the tax money, and poss save some up in case we decide to go down a private education route. Do you know if the Woolwich one pays interest if you end up net in credit?
Not a 100% sure but I think not, you can always give them a call. I think as well if you have rich relatives they can use a saving pot as well so saving you interest on the mortgage! Not sure if that still applies. Just a thought.
We're with First Direct, and think that they're fab. You can fully offset your mortgage without incurring a charge - you just have 2 (or more) different accounts - one with -£XK and one with +£XK. Not all of your accounts have to be offset so you can have additional interest-bearing savings accounts to use when you are in a net credit position. The other potential benefit is that not all of the accounts which are offset for interest purposes have to be joint accounts, so Dh and I can have separate accounts which are part of the offset arrangement. We run our set-up in such a way that we never actually pay off any of our (huge) mortgage acount - but instead we just have cash in different savings accounts, some earmarked by specifically as mortgage "repayment", some for school fees, other being job-related low interest loans which we've taken out to reduce our interest repayments.
We do have to manage the issue about going into a net credit position, but usually I can predict that and will switch some funds to a different account/investment.
Also when we took out the current mortgage we asked for more than we needed - we viewed that with the offset facility we were effectively being given the OK for a huge overdraft faciity if we ever wanted/needed it.
We had a first direct mortgage until last year and thought it was great, we often paid off more and then raided when we needed to pay builders, worked brilliantly and enabled us to pay off more mortgage than we would have done otherwise
We would still have one but we took out a fixed interest buy to let so couldn't have one
I think tissy has the current account mortgage where you are £xxxxx overdrawn - that's the one we used to have. I seem to remember that at the time we were switching they were phasing that out but keeping it for existing customers. So if we'd stayed where we were we'd still have it but we wouldn't be able to get one now because they don't offer it.
I haven't checked though.
We have the Barclays account - Openplan.
We already had a Barclays current account, but our mortgage was with a different company. Our Barclays private banker arranged everything - which included having our house revalued by a surveyor, and dealing with the original mortgage company.
I love the account - there is just no worry with it, as we have all our savings there, and also it comes with a reserve account.
The Barclays account doesn't show your balance at -£xxx,xxx - instead it puts everything in pots, so you have your current account pot, your savings pots, your mortgage and your reserve account. For interest calculation reasons, they add everything together, but for your day to day budgeting, you know exactly where you are.
The one downside is that you can't get promotional short term interest rates, so everything is at the market rate. If you have lots of savings, this should not matter much. If however, you don't have any savings, it is probably not the best product.
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