A current account mortgage, also known as a current account offset mortgage, is a type of loan that allows the borrower to link their mortgage to a current account.
With a current account mortgage, the borrower’s account balance is used to ‘offset’ the mortgage balance, which can reduce the amount of interest paid on the mortgage. For example, if the borrower has a mortgage balance of £200,000 and a current account balance of £10,000, they will only pay interest on £190,000 of their mortgage.
Current account mortgages can be a good option for borrowers who have a large amount of savings or who receive a significant portion of their income in their current account. It’s important to note, however, that current account mortgages may come with higher interest rates and fees compared to other types of home loans, so it’s important to carefully consider the overall cost of the mortgage before deciding if a current account mortgage is the right option for you.
