ONE ACCOUNT FROM ROYAL BANK OF SCOTLAND

From ESSEX, 1 post

Can anyone give me information in regard to the ONE ACCOUNT from RBS.



I understand the principles of the one account and how interest is offset. However, when I use the shrinker model on the account wesbite, I am able to reduce my mortgage of 25 years just under 5 years. I cannot understand how this happens.



I think I am missing a fundamental point of this one account.



I was playing around with the following figures in the online shrinker model:



FIRST STAGE



Value of my home - £180,000

How much do you want to borrow - £178,000

How many years is the mortgage based on - 25 years

Based on a repayment mortgage



In the above scenario I will be paying £1224 per month (rate of 6.7%) over 25 years.



SECOND STAGE



What is the total income that I could put in to the bank account each month - £5700



What income would you have left over after all your outgoings each month - £2000



How much could you increase your repayments by each year - 0%



What savings could you put into the one account - £20,000





Based on the above figures I am able to reduce my mortgage term as follows:



Mortgage term reduced to 4 years 10 months

Interest payable reduces from £367,262 TO £203,794

Saving interest of £163,468



This produces an effective rate of interest at 1.2% (initially 6.7%)



Can someone explain how this is possible? Are there any catches in regard to the one account? Is there something about leaving the same amount of money in the one account for 25 years or until your retire ?



Any help would be greatly appreciated.







Regards





Sandeep

From Norwich, 3 posts

moneyfacts.co.uk have recently launched a brand new website, their new mortgage section has seen some major improvements, well worth a visit.

From Wales, 1 post

I'm exactly the same as you. Did you use them in the end??? it sounds too good to be true.