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Current account mortgage debt fears

An Aberdeenshire IFA is calling for lenders to toughen up on borrowers who do not stick to their current account mortgage repayment plans.

Geissler Financial Services adviser Wolfgang Geissler says borrowers are not being made aware of the risks attached to current account mortgages.

He says the products have become popular with cash-rich local oil workers earning around £80,000 a year. He fears borrowers see the products as a soft option that will enable them to delay paying off their mortgage indefinitely.

Current account mortgages offered by high-street banks are slowly being replaced by offsets. The former use just one account while the latter use several. Both are secured against a customer&#39s home.

Geissler believes products that do not oblige customers to make regular payments encourage people into debt.

Charcol senior technical manager Ray Boulger says: “I would question whether consumers who are not using all the facilities offered by the account have been sold the right product.”

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