Cheque books seemed to subtly evaporate out of the UK transaction culture, until recently, when the Cheque Book Mortgage revolutionized the dealing terms. A cheque book mortgage, also referred to as the Current Account Mortgage (CAM), is an innovative and flexible concept, which empowers the account holders in various ways and thus ensures much better control over the financial aspects. It is yet another addition to the mortgage types in UK, with a host of distinctive features for its users. If you have been struggling with the management issues in this respect, then read on and find out about a Cheque Book Mortgage and benefit from the various related features.

Conceptual Specifics

A current account mortgage has been christened as a cheque book mortgage as it enables all borrowings in a single account, with the provision of a cheque book to make drawings. With all borrowings the reference is towards mortgage loans, personal loans, credit card loans and all other current account and savings account transactions in one account. And despite the elaborated grouping, the mechanism is pretty straight forward. From the overall income deposited to this account, whatever is left post deduction of outgoings, is forwarded as the mortgage payment. This implies deployment of credit balances to balance debts. The foremost logical benefit extended by this procedure is the immediate reduction of interest payments.

Beyond the basics

In addition to extending the basic benefit of reduced interest charges, a cheque book mortgage also substantially assists by allowing overpayments, underpayments, lump sump payment terms, payment holidays and other such customized tools. For instance with the overpayments clause it means repaying more than the pre defined loan amount, thus saving on the corresponding interest charges. Likewise lump sump payments also impart the desired flexibility. While the stated are the features beneficial for those who expect surplus finances, provisions like underpayments and payment holidays, assist during the times of unanticipated overspending. This can perhaps be best understood by a self employed person, who has less income stability.

Another positive extension of this form of account maintenance is a lowered tax bill. With a cheque book mortgage account, at the surface there are no interest earnings and hence zero related tax. However, as evident, interest is saved and thus earned. Please note that the stated is just an overview on what all is possible with cheque book mortgage, the exact nitty-gritty however would vary with lender’s treatment of the subject.

The add-ons

A cheque book mortgage as a concept has overgrown its literal meaning i.e. the flexibility is no longer restricted to just the cheque book. Current account mortgage account subscribers also have the privilege of making payments via plastic cards. This feature extends the dual benefit of lowered interest charges along with the ease of handling as imparted by the plastic cards.

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