sammyh

iTrader: (1)

I'm thinking of changing to the virgin one account is it any good?

Chris L

Sammy

Just in the process of changing. There are loads to choose from. Virgin seemed more friendly and helpful than most, so I've chosen them. If you go to their website, they do a selection of booklets (mostly written by independents) that explain the pros and cons. The general view is that within 3-5 years, one in four mortgages will use this kind of account.

It suited me because I get a flexable bank account, save a lot of money on my mortgage and allows me to repay early or use lump sums to reduce my mortgage. They may no be for everyone, but generally, if you have a mortgage inexcess of 50 grand, then you will probably be better off with one of these accounts (bit simplistic I know, but it worked for me )

Cheers
Chris

ca

I've got one (since Jan 99) and have had zero problems to date.

Got any specific questions?

C

Neil Reay

I have had an account for over a year now.

The booklet they produce explains it in detail. As long as you can manage your finances and don't spend up to your limit all the time it works quite well.

Neil.

john banks

I tried it for just over a year but then switched to Egg and saved 1.2% on interest - nearly £100 a month less and still a standard variable rate. But it depends on your circumstances - for me the higher interest rate was costing me too much compared to the benefits - mainly effectively receiving interest on "current account" balance. However, there are lots of flexible mortgages out there now, but whilst most are not as flexible as Virgin, there are much better rates to be had without redemption penalties, allowing overpayments/withdrawals afterwards etc. The other point is with adverts about mortgages saying that you save £x thousand by paying off your mortgage y years early. But what about the lost opportunity cost for that money - a mortgage is one of the cheapest ways to borrow, and I'm currently paying off my mortgage as SLOWLY as possible as the money I could have put into it is being invested and returning around 12% PA tax free (my results with index trackers even including the last 12 months - the last year has not been good, but look at the long term performance). A lot better than 6.7% effective "return" from paying off your mortgage early - the last 12 months excluded - again look to the long term. Over the long term equity returns are in excess of mortgage rates.

[This message has been edited by john banks (edited 23 January 2001).]

Neil Reay

John

What do you charge for a financial consultation? It sounds like you know your stuff!

john banks

I'm just an appropriately cynical b4stard when it comes to this sort of thing. Can wholeheartedly recommend

ca

I picked Virgin cos I wanted to simplify my personal finances, i.e. mortgage, loans, credit cards, etc.. and I wanted to ditch Barclays as they are cr*p!

I must admit I am one of these people who prefers to pay larget chunks off the mortgage rather than borrow to invest, You just never know what is around the corner in terms of the stock market. Plus I'd like the deeds to my house sooner rather than later.

It really is horses for courses, though.

While I can't speak for their trains, they've not put a foot wrong on the one account side.

C

ed the dead

John - index trackers eh?

Why not have a look at more 'risky' funds?
There are some out there that consistently out perform their index and offer higher rates of return with out too much risk. Unless you are using your investments to cover a mortgage you may as well take some risk (and the better returns) with some of your investment.

robski

Is there any way of agreeing an interest rate with them?

I would be worried about base rates soaring, and eneding up paying variable rate!

At the mo, I am looking at a 15 year fixed rate mortagage at 5.69%!

robski

ed the dead

Interest rates are (apparently) going to go down after the budget...

Dave P

I also looked into a Virgin One, but on balance decided to go for Cheltenham and Gloucester. 3.5pct discount year 1, 2pct discount year 2, no tie in either (I think)so just remortgage again in 2 years time. You can also pay off upto 10pct of the mortgage over the year.

Dave

john banks

ed - Index trackers because in the long term they have outperformed >75% of managed funds WM Company research link unfortunately now dead. The study also shows that it is very difficult to predict in advance which funds will beat the index, and those that have previously tend not to stay up there for long - in fact picking a 4th quartile managed fund often gives better performance than recent 1st quartile funds (horse already bolted etc). The variation in return of managed funds will of course be higher - some will beat the index (but not many consistently) but most will in the LONG term be worse than the index - it's a skewed distribution in favour of the trackers. I would love to pick a 1st quartile managed fund as it would beat the index usually, but it's how to do it IN ADVANCE that seems to elude me and most other folk. The WM study shows that the probablility of picking a first quartile fund by going off past performance is no better than random. What is your method - and do you have long term results?

I know this is a controversial area, and I certainly have limited knowledge and experience, I'd be interested to know your thoughts in more detail. Have you looked at