On demand / mortgage current account

magpie

Any thoughts on the best on-demand deposit schemes?

Also, anyone have a mortgage current account or similar?

nesf

I'll try to get the ball rolling on this one.

The benifits versus the drawbacks of having a on demand savings scheme is quite an interesting topic, deserving of a thread of it's own, think i'll start one actually. It's really a matter of personal choice and discipline. Personally I like to have the majority of my money as far away from my grubby little fingers as possible, I like to spend money and have to keep a very tight rein on my ATM account and only feed it in drips and drabs otherwise I'd be spending too much in the month. Also fixed term or limited notice demand savings schemes return better interest so I get more for my money by investing in this way.

In one fell swoop I manage to curtail my spending and make my savings work harder for me. But then again I know I lack the discipline to have free access to large sums of money. But on the other hand I don't think anyone would here would disagree with the need to have a few grand in a easily accessable spot for emergencies. To cover this I have around 6K in a credit union account in my home town (ie not within easy reach of me in Cork). If I'm badly stuck for cash I can go home and draw some out. But I have plenty time to stop myself from drawing cash unnecessarily.

So I don't know off hand any good on demand deposit schemes, but I'll take a look on google for you later when I have a chance

Hitchhiker's Guide to...

First Active have a current account mortgage. Seems that the problem with these so-called flexible mortgages is the too easy accessibility to money. It is essentially just an offering by the bank that allows you to cash in some of your overpayments. Yet, overpayments are generally seen as the best way to reduce your mortgage.

An article on themovechannel.com gave the following advantages and disadvantages of flexible mortgages:

---

Most people would benefit from some of the features of flexible mortgages, but a full lifestyle mortgage is certainly not for everyone.

Consider getting one if:

* You have a long-term view of your mortgage. The benefits of flexible mortgages can be seen most clearly over the life of the product. If you are going for a short term hit, it may be best to look elsewhere.

* You fancy the chances of having spare bits of cash floating around in the future. Overpaying is the key to success with flexible mortgages, as that one of the features that gives them the edge over traditional products.

* If you are planning to trade up to a more expensive home in the future. If you overpay, you can increase your equity in the home and you will have a larger deposit to play with when it comes to moving.

* You get large annual bonuses that could wipe a chunk off your outstanding balance.

* You are a contract worker or self-employed. For anyone with fluctuating earnings, the ability to change the terms of your repayments can be very useful.

* You can foresee the need for further borrowing or payment holidays down the line, and want to start budgeting for it now. You may be planning children, a house extension, a conservatory or a new business. Having that additional borrowing facility, or the opportunity to take a break from payments would really suit you.

* You are planning for retirement. Your kids are moving away and you may want to reduce your debt while you are cash rich.


There may be more suitable options if:

* You are poorly disciplined with your money. (You don't have to admit to anyone that this is the reason you chose a different type of mortgage).

* If you are the sort of person who only pays the bare minimum off your credit card bill. There is not such a pressure to make a certain level of repayments and underpaying can end up costing you a fortune in the long run if you let it get out of hand.

* You are a first-time buyer or anyone else who thinks you will need the early savings provided by loans that are fixed and discounted for several years. If low starting costs are important, then this type of mortgage may not be such a flexible friend.

* If you don't need think you'll need all the features. At the end of the day, there are better rates available and you only get the true value from this type of mortgage by using it properly.

Hitchhiker's Guide to...

magpie wrote:

Any thoughts on the best on-demand deposit schemes?

Best on-demand deposit scheme has to be from ACC Bank (now Rabobank - ACC was sold by the government to the Dutch bank Rabobank). Providing you save online, you get 3%. ACC Bank has always been among the top payers of interest on savings. (this can be seen from the following report from IFRSA: http://www.ifsra.ie/data/pub_files/Interest%20Rate%20Study.pdf : look at pages 21-29)

Northern Rock are generally also seen as high interest payers. Although there was little information about this on their website when i looked (most of the offerings didn't seem to be on-demand).

Irish Nationwide is meant to be okay too, but this is mainly when it comes to one-month notice accounts.

Your friendly local credit union will probably also offer good rates.

Of course, if you have any sort of credit card bill, the best form of savings is to pay this off.

Hope this helps

nesf

Roundtower2 wrote:

first active have a current account mortgage. Seems that the problem with that type of approach is the too easy accessibility to money. It is essentially just an offering by the bank that allows you to cash in some of your overpayments. Yet, overpayments are generally seen as the best way to reduce your mortgage.

An article on themovechannel.com gave the following advantages and disadvantages of flexible mortgages:

---

Most people would benefit from some of the features of flexible mortgages, but a full lifestyle mortgage is certainly not for everyone.

Consider getting one if:

* You have a long-term view of your mortgage. The benefits of flexible mortgages can be seen most clearly over the life of the product. If you are going for a short term hit, it may be best to look elsewhere.

* You fancy the chances of having spare bits of cash floating around in the future. Overpaying is the key to success with flexible mortgages, as that one of the features that gives them the edge over traditional products.

* If you are planning to trade up to a more expensive home in the future. If you overpay, you can increase your equity in the home and you will have a larger deposit to play with when it comes to moving.

* You get large annual bonuses that could wipe a chunk off your outstanding balance.

* You are a contract worker or self-employed. For anyone with fluctuating earnings, the ability to change the terms of your repayments can be very useful.

* You can foresee the need for further borrowing or payment holidays down the line, and want to start budgeting for it now. You may be planning children, a house extension, a conservatory or a new business. Having that additional borrowing facility, or the opportunity to take a break from payments would really suit you.

* You are planning for retirement. Your kids are moving away and you may want to reduce your debt while you are cash rich.


There may be more suitable options if:

* You are poorly disciplined with your money. (You don't have to admit to anyone that this is the reason you chose a different type of mortgage).

* If you are the sort of person who only pays the bare minimum off your credit card bill. There is not such a pressure to make a certain level of repayments and underpaying can end up costing you a fortune in the long run if you let it get out of hand.

* You are a first-time buyer or anyone else who thinks you will need the early savings provided by loans that are fixed and discounted for several years. If low starting costs are important, then this type of mortgage may not be such a flexible friend.

* If you don't need think you'll need all the features. At the end of the day, there are better rates available and you only get the true value from this type of mortgage by using it properly.

Excellent Advice, stickied for future reference

doc71

If interest rates go up do how does it affect the current acc mortgage, would you say it still pays of in the long run?

Also if you had eg €100 a month to put in to savings would you be better of overpaying your current account mortgage with the €100?

Is the general belief they are a good thing, if you cant overpay for a period of time is the just a normal variable morgage?

RainyDay

Pay close attention to the rates being offered with current account mortgages. You may well be better off with a standard mortgage at a lower rate.