I started to look at changing my Mortgage a couple of years ago as I was stuck on a fixed interest rate of 6% and felt I could do a lot better. I had recently bought the house so did not have a huge amount of disposable income and had a very small savings pot (no more than £1000). I wanted a flexible rate Mortgage that I could easily manage and overpay without being penalised. I also considered the future; I wanted to start a family and knew that I would get the minimum in maternity play so I needed a facility where I could get back the overpayments on the Mortgage immediately if I needed to. I looked at several options (IF etc) and decided to apply for the One Account as it seemed to give the greatest flexibility in terms of managing the account.
I completed the majority of the application form on line. Within a couple of hours I had received a phone call from the team confirming that they had received my application and they walked me through how the account worked and what information they would need from me. I received the welcome pack a couple of days later and in PLAIN ENGLISH they outlined what information I needed to send them and why this information
was important. I received all the originals back within a week (marriage certificate, bank statements etc) and then was shortly approved. I had further conversations with the team to discuss whether I wanted the facility for the term of the mortgage or for it to reduce. I decided on a reducing mortgage facility as I could then see I was making progress.
Getting everything set up
Ok, when you get your head around the management of the account it is really simple and logical. The difficulty I found was actually getting my head around it. I understood the concept that it was one pot of money and the web front end was simply a way to view the status of my account virtually e.g. the £x in my current account was not really there, as was the £x in a savings plan. it is all one pot and it is just the way I am viewing my account ... confused ...so was I! I phoned customer services 3 times in all to get them to explain it to me and walk through some examples. Tthey were fantastic. Very patient and did not make me feel stupid. I played with the set up a few times; that is the great thing about it, you can change the way your view your account to fit with your requirements so it all becomes a lot clearer and certainly more easy to manage. So, how did I approach it? Well, I had some key requirements:
I wanted to be able to overpay on my Mortgage
I wanted to be able to save some money every month
I wanted to be able to easily change my Mortgage payments to fit in with my circumstances
Overpaying
I knew how much I could afford to pay each month on the Mortgage and when I had committed to pay the Mortgage off by. Using their very simple interface I put in the figures and straight away saw that based on the term ONLY I could repay the Mortgage in the time allocated by paying less than I originally thought. I then put in how much I could afford to pay, clicked on calculate the end date, and straight away I saw I could repay my Mortgage some 6 years early ... great stuff!
Saving
I wanted to be able to put away some money each month for emergencies, a holiday fund, treats and car repairs etc. Again, using the accounts very simple interface I was able to set up a number of savings pots for different things; I wanted an emergency pot that I would pay £50 a month into until it reached £1000 and then keep it there as a just in case, I could do this; I wanted a treats pot that I could pay in £50 a month until I got to £500 and then spend it, I could do this; I also wanted a fund that I could put money in as and when (e.g. any bonuses from work, birthday money etc) and just do with it what I wanted with no set plan, again, I could do this.
And then the baby came along
Fantastic! I was finally pregnant and expecting the baby in 9 short months. Financially this was going to be tough. I had just changed jobs so no maternity pay and I wanted to be off for 6 months. I knew from the overpayments to the Mortgage that I had a couple of thousand pounds I could remove from my Mortgage pot and I also had some of the savings I had set up. I knew however that even with this, things would still be tight. I phoned the One Account team and spoke to them about it and decided to increase the term of my Mortgage to the maximum I could have, this would reduce the monthly payments I had to make. I then went into the Mortgage pot and reduced my monthly payment by a few hundred pounds, immediately I could see when this would mean I would repay the mortgage. After a couple of attempts I got it down as low as I possibly could and this saved me hundreds. Now I am back at work I have increased the monthly payments so I am back on track for reducing the term.
Reports etc
The One Account gives you loads of reports to see how your money is working for you and, maybe more importantly, where it is going. You can allocate every transaction against a category and run reports to show where your money is going; you can set up expected transactions which helps you with affordability; you can see what happens if you do x before you do it. There are too many reports to go into here but there are more than enough to give you the information you need.
Support
The One Account has an email facility so you can email the team and ask them questions, more often than not you end up getting a really good comprehensive reply within 24 hours. This also allows you to order cheque books, paying in books, statement holders etc. The team are also at the end of the phone and I have to say, they have one of the best customer services team I have ever dealt with.
Tips & Tricks
When the interest rates are higher and not to state the obvious, you are obviously paying a lot more in interest and consequently a lot less in Capital. Myself and my Partner both applied for Credit Cards with 0% interest rate and a very low balance transfer fee. We both borrowed £10,000 and transferred this into 2 savings pots in the one account. Immediately we had reduced our borrowing by £20,000 so were paying less interest. Every month we would pay the minimum payment to the credit card provider and also transfer a couple of quid over to the savings pot to cover the balance transfer fee. When the term of the credit card was up we simply transferred the outstanding balance back and closed down the credit card. This does only work when the interest rates are higher, balance transfer rates are normally around the 2.5% mark and the interest rates on the One Account are only about 0.5% more than that so it actually does not make much difference.
In Hindsight, would I do it again?
Yes! Absolutely, without a doubt. The One Account has really worked well for us. It is adaptable and shows you exactly where you money is going every month and how you are spending it. I feel financially confident as I know how we are doing and where we are going. The only thing I would prepare yourself for is the first time you withdraw cash for a cash machine and you see your overdraft. It scared me to death when I saw your available facility is -£150,000; but you do get used to it!
How helpful would this review be to a person making a buying decision? Rating guidelines
We had an account very similar to this with Yorkshire Bank but we ended it after we found we wasn't actually clearing any of the amount owed after 5 years.
jesperado77 28.05.2009 14:15
Great review! I look forward to reading more from you :)
Advantages: Paying off your mortgage quickly and saving you thousands of pounds Disadvantages: You need a lot of common sense and future vision to benefit from this account
gazereth 31.05.2008 (28.10.2009)
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Ciao members have rated this review on average: helpful
Review of The One Account
Advantages: Paying off your mortgage quickly and saving you thousands of pounds Disadvantages: You need a lot of common sense and future vision to benefit from this account
May 28th, 2009
very helpful by (100%):
