Current account mortgages are essentially set up like a bank account, but rather than an overdraft, the account will display the outstanding balance that you've borrowed. This gives you a simplified and accessible view of how much you have left to pay off.
However, one of the main benefits is the flexibility that current account mortgages allow. As whilst many mortgages charge fees for overpayments and early repayments made on the capital outstanding, current account mortgages allow you to pay off as much of the balance each month as you want and can afford to.
As such you can use savings to reduce your outstanding mortgage balance, cutting the amount you need to pay interest on and, at the same time, making your savings work doubly as hard.
You can also transfer more expensive debts to your current account mortgage, lowering the amount of interest you need to pay overall and giving only one monthly repayment to make.
Current account mortgages also allow you to draw on the money you've already paid off your mortgage without having to formally apply for a mortgage repayment holiday. This would give you ready access to a cheap borrowing facility that you could use as and when you needed to.
Of course, you'd also need to make sure that you were clearing more than you were borrowing to avoid getting caught in a sticky situation For this reason, current account mortgages tend to be better suited to those who are confident in managing both their money and their spending.
As with all mortgages, the terms and conditions differ between lenders but one thing that many a current account mortgage provider will request is that at least one salary is paid into the account to ensure that payments are made each month. When you compare the current account mortgages make sure you look at the terms and conditions because this will often be the case.
You should also make sure you are fully aware of any processing fees and/or arrangement fees associated with the loan because this can drive up the overall cost of the mortgage.
Often the first place many people start when applying for bank account mortgages is with their existing bank or building society. Unfortunately many choose to go with them, and end up significantly overpaying on both interest and charges.
As such it is essential that you do not simply accept an offer from your existing bank just because you have used them for years and have always had good service. Obviously this is an important factor that will affect your decision but it is essential that you get quotes from other providers in order to find the best current account mortgages available to you.
Once you understand what you are looking for from your mortgage, you need to compare the current account mortgage deals offered by all the different providers. You can use our current account mortgage comparison to compare current account mortgages side by side and make a decision on which one is right for you.
Mortgage current account can be an ideal solution for many people but unless you are willing to spend the time finding the best one for you, you could end up tying yourself into agreements that you do not want or paying a higher rate than necessary.