What is a Current Account Mortgage?

Current account mortgages are fairly new to the sector. They are quite different to other types of mortgage as they enable you to put off all your nest egg and debts in one single account.

Several lenders offer this type of flexible mortgage that is linked to a current account, and is called a current account mortgage. Your mortgage account and your bank account are merged into one and you are issued with a check book and cash card just as you would with an ordinary current account.

You pay your wage into the account and a proportionality is automatically used to ran into your monthly mortgage repayment. You can pay as much off your mortgage as and when you like, according to monthly minimums put by the mortgage lender. You can also utilize your nest egg to set against your mortgage, paying the mortgage off more than quickly and reducing interest payments.

A current account mortgage allows you to run a current account against the mortgage allowing any money in the current account to offset against the mortgage and reduce the overall interest you pay on the loan. This in bend will reduce the mortgage term.

A current account mortgage is where you set most or all of your financial committednesses into one account. So your nest egg and your income are paid into the 1 mortgage account and all your debts are combined in the same account. It's not so much a mortgage, more than of a large overdraft that's secured on your house.

Current account mortgages work by turning your mortgage into a large overdraft. They allow you to put off all the nest egg you have got against all the debts you that owe. You compound all your debts with all of your income in a single current account. So every clip your wage is paid in, you reduce the amount of the 'overdraft'. Every clip you take money out, the overdraft increases. This agency you can overpay and underpay without being penalised for it.

The more than nest egg and income you have got in your account, the less interest you will pay overall. Since the interest is calculated on a day-to-day basis, you will immediately profit from any overpayments you make.

At any clip you can borrow back some or all of the money you have got managed to overpay on your mortgage. These mortgages are ideal for those who are paid regular bonuses so consequently can reduce the mortgage balance quickly.

The good thing about current account mortgages is that the interest charges on all your borrowings are at a cheaper, variable rate for mortgages instead of the more than common credit card rates. To counterbalance for this, rates on current account mortgages, be given to be slightly higher than standard mortgages.

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