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sorry about the typo - i meant "oneaccount".
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I use a Oneaccount. It is very good, except you have to transfer your mortgage to it - as that is the way it works. It is effectively a personal overdraft that is secured on your house, but you get the effect of tax relief on the interest paid out.
It is very good for people who earn money in dollops, as you can wipe out a chunck of debt overnight and reborrow it when you need to. This saves a huge amount of interest. Strongly recommended.
However the interest rates are a bit higher than those for traditional mortgages, so unless you really make use of the benefits, it maybe better to borrow against your house in a traditional manner.
Speak to someone from Nat West or Royal Bank of Scotland.
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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Interest rates are being offered at around six to seven per cent at present from various financial institutions of excellent standing.
However, I've a friend who is a car salesman for a big Ford dealership - he was telling me recently that, despite such low rates being widely available, his company can still get finance at just over four per cent plus commission because of the overall volume of business put the finance companies' way.
So it might be worth having a word with your dealer's sales person to see what he/she can come up with first; you could get a lower rate and the dealership will still make some commission.
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Rhino,
A quick click on the Autotrader link on your left will give you access to their constantly updated list of best rates (right hand side of their main page). Northern Rock are currently listed on their as offering under 6% and have an online ready-reckoner for costs linked to the Autotrader site.
As for the 4% comment, remember this is the dealer's base flat rate, not the APR.
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Yes I appreciate the comment about the flat rate and APR - the point I was making was that despite interest rates being as low as they have ever been for many years, sometimes it is possible to do even better...:-)
As a matter of fact interest rates on loans are gradually rising by a small amount on a regular basis almost unnoticed.
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you get the effect of tax relief on the interest paid out.
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news to me !!
the interest rates are a bit higher than those for traditional mortgages,
again, that does surprise me. to the best of my limited knowledge, interest rates are lower than traditional mortgages.
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The tax relief is based on the fact in these accounts, you don't earn interest so you don't pay tax on the interest. Instead, the money that would be on deposit is used to reduce the capital outstanding and that saves interest. It is a notional way getting tax relief.
The interest rate for the One accoutn is now at least 1.1% above base rate. There are several discounted ortgages lower than that.
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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I've seen countless comment and analysis in both Money Marketing and Financial Adviser to back this. The notional "saving" through tax is usually more than offset by the higher rate paid. There are numerous low or no penalty mortgages available at present with rates pitched at a level that wipe out the tax advantages of an offset mortgage.
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Agreed, except for people like me who earn money lumpily, so i put a load of money in a few times a year and draw out what I need later. You can;t do this with a regular mortgage. Once you paid off capital you normally can't draw it back down again.
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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Agreed, except for people like me who earn money lumpily, so i put a load of money in a few times a year and draw out what I need later. You can;t do this with a regular mortgage. Once you paid off capital you normally can't draw it back down again.
Which is why I will more than likely switch to one next year. At the moment the lumps are going on other things (and I have a cracking interest rate on my mortgage) but next year my shopping list looks a little thin so mortgage reduction here we come.
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>>You can;t do this with a regular mortgage.
You can with some/many? Northern Rock mortgages.
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FWIW, I agree with Espada.
You pay a premium for having an all-in-one mortgage. The mortgage provider loses out on interest from you, so he has to make his profits somehow. Hence the One account rate is higher than base rate.
And a One account effectively gives you tax relief for your interest received (as you don't actually receive any interest, you cannot be taxed on it...).
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And now back to motoring!!
DD.
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And now back to motoring!!
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dd - apologies if this appears non-motoring, but i am trying to answer a question on financing a car, and the method of raising involves other issues. ( - that is, unless financing cars is considered non-motoring, and maybe better placed in the ihaq thread ?)
rhino - financing your car:
you are best placed to judge the truth by doing your own research.
barring very exceptional cases, in my view, offset loans are the best method of borrowing for any purpose including buying cars - even if you are a non-taxpayer, as long as you have a positive balance even for a single day in any current or savings accounts.
tax-relief is a misnomer, as that applies to borrowings. what you get is net interest on your savings at an effective tax-free rate which is of value ot any taxpayer.
to benefit from the offset system, you do not have to pay in loads of dosh in lump-sums. even a penny a day in credit makes a difference.
my own search tells me that offset deals can be had which have a cheaper than most other mortgages, and cheaper than almost all traditional mortgages. for example, look at the apr figures here:
www.woolwich.co.uk/default.asp?Content=content/OPN/
for a fullrange of deals on offsets (discounts, fixed, tracker rates) see
www.moneyfacts.co.uk/mortgages/charts/mortgages_ca...p
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Rhino
Go and see an independent financial adviser, most of the answers you have received are in sopme way wrong. Offset mortgages work well, but they are not for everybody. Take proper advice.
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Alyn Beattie
I'm sane, it's the rest of the world that's mad.
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We're locked into as very very good 5 yr deal on the mortgage front, so the offset option is regrettably not on the cards. I reckon an on line personal loan may be the way forward on the basis of what I have gleaned thus far. Whatever, the XC90 still seems a good choice despite the Autocar hype of the new Discovery. The interior build of the new variant seems to lose out against Volvo quality.
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