Current Account Mortgages

The Basics

This is a relatively recent introduction into the market and allows you to put all your money in one place, including your savings, current account, credit cards, loans, and earnings. The philosophy behind this type of mortgage is that all your money reduces the outstanding balance on your mortgage, and, as the interest is calculated daily, your interest payments are correspondingly reduced.

Advantages

The potential reduction in your level of borrowings means that over the entire term of your mortgage substantial savings can be made on your overall mortgage payments, or you may be able to pay the mortgage off early.

Disadvantages

There are currently a relatively small number of lenders offering this type of mortgage at present. They are also generally linked to variable rates and so reductions in your mortgage payments in the early years may not be possible with this type of product.