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Current Account Mortgages

Can you offset your mortgage with an offset account? Find out here.

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 27, 2021

This article is going to be explaining what a current account mortgage is, and whether or not it’s a suitable option for you.

What is a current account mortgage?

A current account mortgage allows you to offset your mortgage against your current account.  These products combine both your mortgage and the balance of your current account, meaning you have a single balance to pay off.

Current account mortgages explained

For example, say you have £5,000 in your current account and have taken out a mortgage of £150,000, you are technically £145,000 overdrawn.

This means that when you receive your monthly income, your debt will reduce to the minimum sum, but will of course increase again once the rest of your outgoings for the period have been paid.

As with a standard mortgage plan, you will be required to make a repayment every month over a contractually agreed term. The additional money in your account acts as an “overpayment fund”. So , this means that your mortgage could be paid off over a shorter time period.

Is a current account mortgage the best option for you?

Typically, the interest rates on this type of mortgage tend to be higher than usual. The main advantage is that, if you spend less than you earn every month, you are essentially overpaying your mortgage. This should (theoretically) save you money in the long run.

You need to be organised if you decide on a current account mortgage; do your homework to ensure that this option is affordable, and understand that you could be living in your overdraft, and the consequences associated. If you’re unsure whether a current account mortgage is for you, make an enquiry and the expert advisors we work with will help you determine the best course of action.

Income and current account mortgages

As mentioned, income is a very important consideration when deciding whether offsetting your mortgage with a current account is the best option for you.

A high income is favourable for a mortgage of this type. You will need to have a sizeable monthly wage coming in each month which allows you to comfortably cover the current account monthly payments, plus any other outgoings.

Current account mortgages are often a preferred option for more high-end earners, or joint mortgages.

What other factors impact eligibility for a current account mortgage?

As ever, there are a number of different things that can impact your ability to get a current account mortgage, regardless of what type you opt for.

Such factors include:

Click on the links in the list above to find out how these variables might affect your mortgage application or make an enquiry here for more information.

Current account mortgage providers

There are a number of lenders out there who offer competitive rates and flexible current account offset mortgage deals to eligible customers.

The specialists we work with have contact with many high street lenders and have successfully arrange current account mortgages with the following lenders…

  • Barclays
  • Nationwide
  • Santander
  • HSBC
  • Woolwich
  • RBS Current
  • Danske Bank
  • Halifax
  • Natwest
  • Clydesdale Bank
  • Lloyds TSB
  • Yorkshire Bank

But remember, If you approach these lenders directly, you will be dealing with their own in-house advisor, who works for the lender, not you. They can also only offer products their own bank sells and they can’t tell you if their deal is the best on the market.

They often do a hard search of your credit, which will leave marks on your credit history. Approaching a number of them while looking for the best deal could do significant damage to you credit rating if they all do hard searches.

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How do I compare current account mortgage rates?

We’d recommend that you use one of the advisors we work with. They are experts when it comes to finding the best current account mortgage for your circumstances, even if you have bad credit and they won’t leave footprints on your credit rating.

To compare current account mortgage rates by lender and to find the best option for you, contact us and we’ll refer you to an expert.

Why you should speak to a current account mortgage broker

We’ve helped over 120,000 people find the right mortgage, even those who may have been declined a mortgage or are looking for a bad credit mortgage.

In fact, our customers consistently rate us 5 stars on Feefo, mainly due to our high levels of service, but also because we offer offers a 5-star service with access to expert brokers who are:

  • Whole of market.
  • Have a working relationship with all current account mortgage lenders, not just a select few.
  • Can offer bespoke advice on current account mortgages
  • OMA Accredited advisors.
  • Have completed a 12 module LIBF accredited training course.

Talk to a current account mortgage expert today

If you like what you’re reading or require more information, call Online Mortgage Advisor on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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