Current account mortgages are a type of flexible mortgage and they have been around for well over 10 years in the UK. Current account mortgages work by combining your mortgage and current account into a single account. For example, if there is 3,000 in the current account and the mortgage is 100,000 the balance in the account will show 93,000 overdrawn. The balance is calculated daily and the homeowner only pays interest on the balance. Any saved income you have in your current account at the end of the month is automatically deducted from the mortgage debt you owe. If cash is allowed to build up in the current account mortgage, the savings on interest payments can be significant. For maximum gain, bills can be synchronized to be paid at the end of each month. Every time money goes into your current account, you reduce the amount of the overdraft and every time you take money out, the overdraft increases.
Current account mortgages allow the interest charges on all your borrowings, including credit card debt, to be at the cheaper interest rate of the mortgage, instead of the average credit card or loan rate. So you can save money in the long run, you still need to pay off...
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