An ongoing account mortgage is a kind of flexible mortgage product which combines several financial products into one single account.
As with every other mortgage product, a current account mortgage is going to be secured against the borrowers home. Current account mortgages usually are not usually secured against investment properties.
The real difference between a current account mortgage along with a standard mortgage technique is how the current account mortgage will act as both the borrowers home loan and current account.
Current account mortgages in many cases are known as credit line.
The borrower will normally be required to get their salary or wage paid directly into the current account mortgage and you will be allowed to withdraw money through the personal line of credit as required within a pre-determined upper limit.
In addition to combining the mortgage which has a current account, it's also along with cards, unsecured loans, and cheque book facilities in order to streamline the borrowers overall banking facilities into one product.
Along with assisting to streamline the borrowers banking facilities, a current account mortgage may offer flexible features that standard mortgage products do not, that may further profit the borrower with managing their finances.
Because a current account mortgage is a flexible mortgage it may offer features for example overpayments, underpayments, drawdown of overpayments previously made, additional borrowing facilities, no (or low) redemption penalties.
Together with flexibility, a present account mortgage might help the borrower save interest and settle their home sooner. That is because of a combination of factors such as earnings being paid into the mortgage, daily interest calculations, with no high interest loans (e.g. credit cards) to repay simultaneously.
An ongoing account mortgage can, therefore, supply a borrower with lots of features for organising their personal finances and reducing their mortgage immediately.
However, despite the benefits, it is crucial for that borrower to keep disciplined because excessive withdrawals will increase the total price and term of the mortgage and negate the huge benefits offered.
For that reason, consideration ought to be given before you apply for the current account mortgage. Professional advice could be sought from an independent mortgage adviser.
