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All in one accounts are generally where you have all your transactions run through the one account that includes your loan balance. The idea is that you will pay your loan off faster as at any given time your loan balance is minimised.

How does it work?

Generally you have one loan account that also acts as a transaction account. This account then generally operates as follows:

• You only pay interest on the balance on any given day
• You have your salary directly credited to this account
• You place most of your daily expenses on a credit card that is cleared automatically to your account once per month. The credit card itself has a 55 day interest free period so you never actually pay any interest before the balance is cleared.

Features

• Ability to repay amounts anytime at no charge
• Ability to redraw amounts at any time via keycard or credit card with no minimum.

When is it used?

As interest on most loans are calculated daily the idea is that by having your salary etc directly credited to this account and only drawing out funds as you need them you are minimising the interest being paid on your home loan at any given time.

In effect it is like a mortgage offset account and a home loan all bundled up into one.

Caution on use

This style of loan is generally promoted on the idea that by having all your money run through one account you effectively minimise your loan balance at any given time. However in reality the interest rate charged on these types of loans are typically higher than if you took a professional pack or standard variable loan. As such any benefit may be all but lost or it may even end up costing you more.

In general we recommend you consider whether a good Professional Pack that offers a Mortgage Offset Account will deliver a better result as they often effectively have all the same features but at a lower interest rate.