Why choose a current account mortgage?
There is increased demand for current account mortgages from home-owners looking for flexibility.
A current account product takes the form of a bank account. However rather than showing your home loan as an overdraft, it is shown as the outstanding balance borrowed. More flexibility is one advantage of a current account mortgage, and the main reason many chose this option.
With a standard mortgage often lenders make a charge for over and underpayments, however with a current account deal home-owners can pay off as much of the balance as they like each month without penalty.
In addition savings can be used to reduce the outstanding balance which reduces the interest to be paid. It is important to note that savings used to offset the loan cannot not accrue interest.
If you are looking for flexibility then a current account deal may prove well suited to your needs. Mortgage terms and conditions differ from lender to lender but in general all require a monthly repayment to be made. Usually the requirement is for one salary to be paid into the account.
A current account mortgage could be the right deal for you if you want to have all of your financial accounts in one place. By spending less than you earn you can effectively overpay your mortgage each month, which would clear the debt faster saving you thousands in interest.
To make a comparison of all competitive mortgage deals for your deposit level call an adviser at Deal Direct today.
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