VirginOne

The great appeal of this arrangement is its simplicity. Unlike the 'jam-jar' approach used by other offset bankers (e.g. Intelligent Finance), the Virgin One Account bundles your current account and mortgage together.

Here is how it works. You agree a secured borrowing facility (i.e. a mortgage) at the outset, to a given loan-to-value (LTV) ceiling which defines the limits of current and future borrowing. Any surplus over your actual mortgage is available for future drawdown, but the higher the LTV limit the higher the rate of interest. Any deposits in your current account are offset against your mortgage, reducing the amount of interest you pay and accelerating capital repayment.

Individual rates are not that fantastic, but the whole is greater than the sum of its parts. The arrangement eliminates the distinction between current and savings accounts and between overdraft, unsecured, secured and credit card borrowing, as well as simplifying functionality and navigation. All net borrowing is charged to the mortgage (up to the LTV limit) at a single rate of interest. You access your funds and draw down through your cheque book or one of two debit cards.

Simply brilliant!