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AteMoose

I This Crazy World Of Low Savings Rate

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Is it worth re-mortgaging to a oneaccount of one of the other combi mortgage/savings accounts?

http://www.oneaccount.com/onev3/index.shtml

You have to be careful with the fine print on those. If I recall correctly, the bank can often choose to "take" all your savings, denying access to some or all of the excess in the account, otherwise they are a good idea imo.

In general, it is good to have some savings in a bank other than the one in which you have your mortgage. Otherwise, in the case of a bank bust or similar, your position will be netted and you will lose access to liquidity.

Edited by Tiger Woods?

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I remember a few years back these accounts were viewed as having uncompetitive rates (when compared to Base+0.5%). These must be worth thinking about again these days...

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FSCS...if you have a loan with the failed bank, your savings protection is offset.

If you lose your savings with a failed bank and the mortgage is elsewhere, you are protected.

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FSCS...if you have a loan with the failed bank, your savings protection is offset.

If you lose your savings with a failed bank and the mortgage is elsewhere, you are protected.

Offset, so if you have a 150k loan, your savings protection is offset to 200k?

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Offset, so if you have a 150k loan, your savings protection is offset to 200k?

no. the FSCS is £50K

so if you have accounts at ABANK and it goes bust, you lose your savings, but your mortgage may be reduced. The mortgage will be sold on.

Im sure up to 50K the effect is much the same on balance, in that your mortgage will be reduced, but an enforced capital repayment may not be in your grand scheme.

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no. the FSCS is £50K

so if you have accounts at ABANK and it goes bust, you lose your savings, but your mortgage may be reduced. The mortgage will be sold on.

Im sure up to 50K the effect is much the same on balance, in that your mortgage will be reduced, but an enforced capital repayment may not be in your grand scheme.

right I see, not a major biggie. If your one of these offset/one account thingies is rolling anyway. If it goes bankrupt you could re-mortgage to a different deal and get your savings back if you need them...

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right I see, not a major biggie. If your one of these offset/one account thingies is rolling anyway. If it goes bankrupt you could re-mortgage to a different deal and get your savings back if you need them...

re-mortgage?..no, your mortgage will be sold and your debt continue.

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re-mortgage?..no, your mortgage will be sold and your debt continue.

yes, BUT if your on one of these mortgages your not locked in, you can remortgage to a different company at any time...

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For higher rate taxpayers it's reasonably efficient. It may not give the best rate, or be the most financially astute thing to do with money, but for some people it can really suit your lifestyle.

The One Account has worked extremely well for my husband and I as we don't spend a lot and that vague feeling of always being overdrawn helps keep impulse purchases down. However my sister who is not so good with money would be a disaster with one as it doesn't force you to actually pay anything off. It very much depends on how disciplined you are.

If you have 50% LTV you get the best rate, which is about 3.55% from memory. Not fantastic, but you can always borrow up to your facility at any time (!). We have always gone for a 50% LTV even when we needed less and paid our savings in straight away, giving us great headroom in case of any disasters. It also makes tax returns a doddle.

Edit to add: if you're worried about banks failing, paying off mortgage debt instead of holding savings can also give peace of mind.

Edited by LianeR

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yes, BUT if your on one of these mortgages your not locked in, you can remortgage to a different company at any time...

OIC after the failure....like I say, might be OK for you, but for most, an enforced capital repayment is not what they are looking for.

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re-mortgage?..no, your mortgage will be sold and your debt continue.

With the One account and other offset mortgages, the "savings" is just actually an offset to the "debt". They will be netted out with the debt if the bank goes under. Note it isn't really "savings" which is there, since you don't pay tax on it! - All it is is debt at a lower level.

I checked this very carefully around the 2007 times.

Link from the Guardian...

http://www.guardian.co.uk/money/2008/sep/21/mortgages.banks

....

The Financial Services Compensation Scheme (FSCS) will normally refund depositors up to £35,000 if their bank or building society fails, but it says that if a saver also has a mortgage with that bank or building society, the customer's savings could be taken and used to pay off the loan.

Suzette Browne, a spokeswoman for the FSCS, says: 'In the event of a bank going into default, the FSCS would consider the overall net claim. If the claimant's borrowing exceeded their savings, there would be no overall claim against the bank and the claimant would not be entitled to any compensation.'

This means that if a customer had a mortgage of £200,000 and savings of £150,000 with the same bank, a 'set-off' would be applied by the insolvency practitioner dealing with the bank failure. In this example, she says, 'the individual would end up owing the bank £50,000, so there would be no positive balance and no claim [for compensation].'

...

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With the One account and other offset mortgages, the "savings" is just actually an offset to the "debt". They will be netted out with the debt if the bank goes under. Note it isn't really "savings" which is there, since you don't pay tax on it! - All it is is debt at a lower level.

I checked this very carefully around the 2007 times.

Link from the Guardian...

http://www.guardian....mortgages.banks

....

The Financial Services Compensation Scheme (FSCS) will normally refund depositors up to £35,000 if their bank or building society fails, but it says that if a saver also has a mortgage with that bank or building society, the customer's savings could be taken and used to pay off the loan.

Suzette Browne, a spokeswoman for the FSCS, says: 'In the event of a bank going into default, the FSCS would consider the overall net claim. If the claimant's borrowing exceeded their savings, there would be no overall claim against the bank and the claimant would not be entitled to any compensation.'

This means that if a customer had a mortgage of £200,000 and savings of £150,000 with the same bank, a 'set-off' would be applied by the insolvency practitioner dealing with the bank failure. In this example, she says, 'the individual would end up owing the bank £50,000, so there would be no positive balance and no claim [for compensation].'

...

thats right, today you have £150K in savings...tomorrow, you dont.

As I say, its the enforced repayment of that loan with what you thought you had that would hurt many....you know, bank of mum and dad cant now put deposit on kids house, pay for the wedding, replace that boiler, car or whatever.

better to have each at a seperate firm. and no more than £50K in savings in any one organisation.

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Made tentative enquiries at HSBC if they had anything like it. They don't. One account or there's some lloyds one they recon.

Nationwide has an offset IIRC.

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  • 150 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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