Check the small print when it comes to CAMs - Mortgages - News - Moneyfacts


Check the small print when it comes to CAMs

Check the small print when it comes to CAMs

Category: Mortgages

Updated: 12/11/2012
First Published: 09/11/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Current account mortgages, or CAMs as they are also known, are a relatively new and niche type of mortgage.

CAMs consolidate mortgage borrowing, outgoings and income in one product; however, due to their uniqueness, it is important to check out whether a CAM is definitely for you prior to signing up.

Here are some handy tips to help you out:

• Who are CAMs best suited to?

Some CAM lenders may state minimum income requirements to ensure a regular monthly income.

To make the most of a CAM, you should be disciplined with your finances, have a decent regular monthly income and be willing to accumulate money in the account, rather than dip into the capital facility.

• What are the benefits of having a CAM?

CAMs can help to reduce monthly mortgage payments. This is due to the interest being calculated daily, based on the balance on the account.

Money paid into the account will reduce the borrowing amount and push down interest payments, as will any remaining funds showing at the end of the month.

The higher the balance becomes the bigger the saving on interest payments. Essentially, the more you pay into a CAM, the more you will get out of it.

• So are there any disadvantages?

Whilst there are no definitive disadvantages, CAMs are not necessarily suitable for everyone.

As with any personal finance product, check the small print to make sure the deal's features suit your lifestyle and financial needs.

Interest rates on CAMs can also be higher than other conventional mortgages.

• Do these mortgages have the same features as others?

Yes. Despite the fact that the mortgage is linked to a current account, the basic features remain the same.

Fees and charges still apply, with some lenders offering flexibility with payments, such as overpayments, underpayments and payment holidays.

As well as the initial rate, take time to research the product's features, such as arrangement, or redemption fees.

Check the small print of the product and bear in mind any future plans you have which could impact on the running of the account or your ability to make repayments.

Compare the best mortgage rates

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.