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