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 It is now over 6 months old so the content may be out of date.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.

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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.

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