| Current account mortgages are a type of flexible | | | | charges, such as early redemption penalties. |
| mortgage and they have been around for well | | | | Interest Rates |
| over 10 years in the UK. Current account | | | | In general, you will find that you pay for the |
| mortgages work by combining your mortgage | | | | flexibility of a current account mortgage through a |
| and current account into a single account. For | | | | higher rate of interest than more traditional |
| example, if there is £3,000 in the current | | | | mortgages and because the lenders are also |
| account and the mortgage is £100,000 the | | | | taking a risk with current account mortgages. |
| balance in the account will show £93,000 | | | | They will make less money on the mortgage if |
| overdrawn. The balance is calculated daily and the | | | | you pay it back early, or they might not get the |
| homeowner only pays interest on the balance. | | | | money back if you are unable to discipline yourself |
| Any saved income you have in your current | | | | and make your repayments. A current account |
| account at the end of the month is automatically | | | | mortgage works both ways and if you get it |
| deducted from the mortgage debt you owe. If | | | | right, in particular the management of it, then it |
| cash is allowed to build up in the current account | | | | will benefit both the lender and the borrower. |
| mortgage, the savings on interest payments can | | | | The Downside of Current Account Mortgages |
| be significant. For maximum gain, bills can be | | | | The downside with current account mortgages is |
| synchronized to be paid at the end of each | | | | financial discipline. You need financial discipline and |
| month. Every time money goes into your current | | | | planning to properly maintain current account |
| account, you reduce the amount of the overdraft | | | | mortgages and to be able to resist the |
| and every time you take money out, the | | | | temptation to use the large sums of capital |
| overdraft increases. | | | | available. |
| Current account mortgages allow the interest | | | | The amount of debt visible on the current |
| charges on all your borrowings, including credit | | | | account balance, in the tens or hundreds of |
| card debt, to be at the cheaper interest rate of | | | | thousands, can also be intimidating to borrowers |
| the mortgage, instead of the average credit card | | | | when viewed on a daily basis! |
| or loan rate. So you can save money in the long | | | | Benefits of Using an Independent Mortgage |
| run, you still need to pay off the non-mortgage | | | | Broker |
| debt as quickly as possible. If you simply add | | | | Due to the range of current account mortgages, |
| these debts to your mortgage and pay them off | | | | independent mortgage brokers can advise and |
| over 25 years, instead of 3 or 4 years, overall | | | | give you information, as well as being able to |
| you'll pay more interest. | | | | judge suitability for having a current account |
| Different features with Current Account | | | | mortgage. |
| Mortgages | | | | Conclusion |
| There are a wide range of current account | | | | Current account mortgages combine your current |
| mortgages in the marketplace. Different current | | | | account and mortgage into one account. They |
| account mortgages come with different features | | | | offer flexibility with options such as overpayment |
| such as overpayments, payment holidays, | | | | which can allow you to pay off your mortgage |
| underpayments and credit card and loan facilities. | | | | quicker. Although current account mortgages are |
| Some current account mortgages include a | | | | fairly new in the marketplace, their popularity is |
| restriction on withdrawals, overpayments and | | | | increasing as more home owners recognize the |
| underpayments and some include fees and | | | | benefits they offer. |