As I have blogged previously, we refinanced our home mortgage at the end of last year. The primary reason for our refinancing was to take advantage of the current loan offers available in the market. When we financed our home back in 2001 (when we bought our home), the loan package then was a pure loan package with little advantages and flexibility compared to what is offered nowadays. It was then a loan package based on monthly rests and additional payments are deemed as pre-payments without any reduction in the principal sum.

With the new loan package, however, we now have an all-in-one account. Basically, the loan account is merged with a current account. Whatever sum of monies put into the loan account will be used to pay the loan instalment first and any surplus will go towards reduction of the principal sum. That way, the interest chargeable (which is on daily rest basis) is immediately reduced and at the end of the day, we are able to redeem our mortgage loan much faster compared to the original loan package. There is no penalty or notices required for the additional funds put into the current account unlike the original loan package. Such flexibility is definitely welcomed and if you are still stuck with the old type of mortgage account, you should seriously find out about the new packages available.