A Current Account Mortgage, or CAM, is a flexible mortgage which links your current account to your mortgage. Interest is charged daily on this type of mortgage and every time you make a deposit into your current account (your salary for example), you are reducing the amount of your mortgage on which you are charged interest.
As an example, if you have a mortgage for £100,000 and have £1000 in your current account you will only be charged interest on £99,000 that day. If your salary of £1000 is deposited in your account the next day (and you haven't made any withdrawals) you will be charged interest on £98,000. In other words, the higher your current account balance, the less interest you pay and in this way you can pay off your mortgage more quickly.
Off-set mortgages work in a similar way. Unlike a CAM you have separate savings and current accounts and the total of your savings and balance of your current account are 'off-set' against your mortgage. Your savings earn the same rate of interest as your mortgage and any borrowings you make (like an overdraft or credit cards) are charged at the same rate as your mortgage. This might be an option for you if you are able to maintain reasonably high savings and current account balances.
