Quick Enquiry
These types of Mortgage have been introduced more recently. They have been introduced to cater for the changing patterns in working and life styles.
There are several attractive features. One of the main ones is that interest is usually calculated daily rather than being applied monthly or yearly. This means that interest does not accumulate and therefore monthly payments are kept to a minimum.
This type of Mortgage also allows over payments. So if you decide that you wish to pay off a lump sum you can do so and by doing so reduce the interest. This can make quite a big difference to how much you pay in interest over the course of the Mortgage and allows you to pay the Mortgage off early if you wish.
You can also draw down over payments should you need the money you overpaid at a later date.
Current Account Mortgages group together all your borrowing and savings. This means that all your borrowings are at the Mortgage Rate which is usually considerably less than personal loan and credit card rates.
Usually you have your savings held in this type of mortgage and your salary paid into it. This means that as interest is calculated daily you only ever pay interest on the actual amount you owe.
Advantages
- Daily interest
- Over payment facility – potential to reduce amount paid in interest and reduce the term
- Under payment facility – particularly useful in times of hardship
- Current Account Mortgages give good rates of interest on borrowings and savings
- Current Account Mortgages ensure your interest payments are kept to a minimum
Disadvantages
- These Mortgages need to be managed carefully to take advantage of the benefits and more importantly to make sure they are repaid at the end of the period of the loan. This makes them less attractive to people who do not want to have to manage their Mortgage.
- This type of Mortgage could encourage people to overstretch themselves on their borrowings.
