What Are Current Account Mortgages?
Current account mortgages have not been around very long and are still quite new. Most banks and building societies are now starting to offer them however and they can also be used for remortgages. These mortgages are very different from the standard mortgages that most people are familiar with and would probably have availed of for their first time mortgages.
With current account mortgages allow you to off set all your savings and your mortgage into one single account. This type of mortgage or remortage is a type of flexible mortgage and it is usually linked with your current account. What happens is that your mortgage account and your current bank account are merged into one. You are issued with a cheque book and an ATM card just as you would normally be.
When you take out this type of mortgage or re mortgage you have your salary paid into the account. Your monthly mortgage repayment is automatically taken out every month and you can pay as much off your mortgage as you choose. You will also be given a monthly minimum which is set by your remortgage broker.
This can be the best remortgage deal as you can use the savings in your current account to pay off your mortgage and this allows you to reduce the amount of interest you pay each month. Interest is normally calculated on a daily basis and the amount in your current account is used to reduce the overall amount of interest that you will pay. This in turn helps to reduce the term of your mortgage or remortgage loan.
With current account mortgages you are in fact putting most if not all of your financial commitments into one bank account. This means that your savings and your earnings are paid into the one account and all your debts are combined. Many people like to refer to it as one large overdraft that is also secured on your home.
Whether you are looking for a remortgage quote, a bad credit remortgage, or even first time mortgages it really is worth looking into the availability of a current account mortgage. You can manage everything from one account and you can overpay your mortgage whenever you choose. You can also borrow against your mortgage amount using your cheque book or ATM card.
A number of banks and building societies give you a percentage facility which means that you can borrow a further percentage of your mortgage or remortgage loan without having to reapply. You will need to check the details of this with your current remortgage broker but in most cases it is around 5%.
With current account mortgages the more savings and income you have in your current account the less interest you will pay. Interest is calculated on a daily basis and this means that if you have additional funds in your account you will benefit immediately. Many are saying that these really are the best deals remortgage companies can offer and if you are thinking or remortgaging then this is definitely worth looking into.
