Advisers should take a look at the revamped current account mortgage from Virgin One, now wholly owned by Royal Bank of Scotland.
Initially launched in 1997, Virgin One has taken a different approach to banking compared with traditional banks and mortgage lenders. Clients pay a single interest rate on everything they borrow – their mortgage, loans and credit cards – and get flexibility on how much they pay on their mortgage each month.
Virgin One has overhauled the account to let clients view their incomings and outgoings as if they were separate accounts while still benefiting from a single interest rate, unlike most offset accounts which operate with varying rates.
To open an account, clients need to borrow at least £50,000 and agree to pay their income into the same account.
Virgin is looking to develop relationships with intermediaries by offering fast application to offer and flexible underwriting. Inter-mediaries will be able to get regular updates via email and by logging on to the Virgin One intermediary website
This type of account is beneficial to high-net-worth clients who keep sizeable amounts in a savings account but not the average mortgage holder who does not have substantial savings.
Virgin One can be tax-efficient, especially for higher-rate taxpayers, as with this account it is interest saved rather than interest earned, which means they have no tax to pay on their savings within the account. I would be happy to recommend the account to clients – if they fit the criteria.
Bob Riach is proprietor of Riach Independent Financial Advisers.