In a similar way to the Offset mortage, the Current Account Mortgage (CAM) balances, not only the actual savings of the borrower against the overall cost of the mortgage, but also utilises whatever amount is actually in the borrower’s current account and ‘offsets’ that against the repayment of the mortgage.
But more than this, CAMs also takes in to account any other existing outstanding loans, including credit card repayments and takes over these loans. The advantage to the borrower is that mortgage loans are by far the cheapest loans when it comes to rate of interest, and so by absorbing this outstanding indebtedness the interest paid on these other outstanding loans is very much reduced.
It is obviously beneficial if the borrower has no other debts when considering this type of mortgage, and could manage to maintain both a healthy savings and current account. But there are still advantages whatever the borrower’s financial position.
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