The One account
Encyclopedia
The One account Ltd is single-brand subsidiary financial services company offering offset and flexible mortgage
Flexible mortgage
The term flexible mortgage refers to a residential mortgage loan that offers flexibility in the requirements to make monthly repayments. The flexible mortgage first appeared in Australia in the early 1990s , however it did not gain popularity until the late 1990s...
s in the UK. The company pioneered the offset mortgage in the UK and; was conceived as a joint venture between Virgin Direct
Virgin Money
Virgin Money is a UK-based financial services company owned by the Virgin Group and founded by Sir Richard Branson in March 1995. It was originally known as Virgin Direct, and pioneered index tracking by launching a value Personal Equity Plan into the market. In the 2000s Virgin Money expanded its...
(Virgin's financial services company) and The Royal Bank of Scotland in 1997.
Initially, the company was known as the 'Virgin One account' and promoted to Virgin Direct's 200,000 strong UK customer base. The launch was very successful and was extended to the entire British public in May 1998.
From January 2003, the company relaunched as 'The One account' when The Royal Bank of Scotland took a majority shareholding, becoming an RBS mortgage brand along with Natwest and First Active
First Active
First Active was an Irish bank, and former building society which was merged in to Ulster Bank in late 2009, ceasing trading in February 2010. It traditionally offered a range of mortgages, savings, investment, pension and life assurance products, but from 2007 onwards, also offered credit...
.
Distribution
One account products are sold directly by phone, internet and post. They are also distributed through intermediaries - mortgage brokerMortgage broker
A mortgage broker acts as an intermediary whose brokers mortgage loans on behalf of individuals or businesses.Traditionally, banks and other lending institutions have sold their own products. However as markets for mortgages have become more competitive, the role of the mortgage broker has become...
s and Independent Financial Adviser
Independent Financial Adviser
Independent Financial Advisers or IFAs are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products from the whole of the market...
s.
Current Account Mortgages
The type of offset products offered by The One account are called Current Account Mortgages (CAM). As the name suggests, customers consolidate the balances of their mortgage, traditional current accounts, personal loans and, if desired, their saving accounts into one account.A low, mortgage-style interest rate is charged on the net balance of the account on a daily basis. Since customers pay their salary into the account this money has the effect of reducing the average balance and, therefore the interest paid when compared with a traditional mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
. The interest rate used to vary with the Bank of England base rate, however in recent months the One Account interest rate has not decreased along with the bank rate. In June 2008, customers were informed that their mortgage rates would increase by 0.25% to reflect 'current market conditions' although the Bank of England rate had not increased.
The One account vaunts the flexibility afforded by current account mortgages - customers may over or underpay for periods without prior agreement. The offset mortgage provides many the opportunity to save tens of thousands of pounds in interest charges and pay off their mortgage years early.
In 1999, research from NOP Financial validated by David Goldreich of London Business School
London Business School
London Business School is an international business school and a constituent college of the federal University of London, located in central London, beside Regent's Park...
proved that eight out of every ten people in the UK with borrowings of more than £50,000 would be better off with a One account.
Industry accolades
In June 2002, The Virgin One account scooped both Best Mortgage provider and Best Current Account provider at the Guardian/Observer Consumer Finance awards.In the following year, The One account was awarded ‘Best Mortgage Provider’ for the 3rd year running at The Guardian/Observer Consumer Finance Awards, ‘Best Current Account and Offset Mortgage Provider’ at the Moneyfacts
Moneyfacts
Moneyfacts Group PLC is a financial information company founded in 1988 based in Norwich in the United Kingdom employing over 100 people.- History :...
Awards, ‘Best Current Account Mortgage’ at the Your Mortgage Awards and ‘Lifestyle Lender of the Year’ at the Mortgage Strategy Awards.
More recent awards include 'Best Current Account Mortgage' from Mortgage Magazine in 2005 and 2006, 'Best Current Account Mortgage' from Your Mortgage Magazine in 2005, and in 2006 The One account was voted the 'Best Current Account and Offset Mortgage Provider' by Moneyfacts
Moneyfacts
Moneyfacts Group PLC is a financial information company founded in 1988 based in Norwich in the United Kingdom employing over 100 people.- History :...
.