Going a bundle - or not

If you are sold on the idea of concentrating your efforts on repaying debt, you don't necessarily have to sign up for a current account mortgage.

Patrick Bunton of mortgage broker London & Country, points out that not everyone hates their current bank: 'A lot of people have a good relationship with their bank and don't want to go to an unknown entity.'

But you may be able to benefit from the money management system promoted by the current account product:

• If you have savings on deposit, but don't repay your credit cards in full each month, start by concentrating on paying off card debt.

• If you can afford to save, it may make sense to increase monthly mortgage payments, to shorten the term of the loan, rather than putting savings on deposit. Check for any early payment penalties. Most people want a rainy day fund - equivalent to between three and six months' income - to draw on in emergencies. But after this, debt repayment offers a good, risk-free return.

• Consider a flexible mortgage. These are halfway between current account mortgages and conventional home loans. There are facilities to repay debt without penalty and, sometimes, to take payment breaks. You can also get access, within limits, to the overpayments (which will be stored as equity in your property) if you need to raise capital again. The rate of borrowing should be cheaper than on a conventional personal loan or credit card. They work best if you regularly pay off more than you need, or pay off lump sums. If you never keep a balance on your credit cards and have no overdraft or personal loan, a flexible mortgage and a low-cost current account may be all you need to smarten up your financial management.

Bunton likes the flexible loans available from Yorkshire and Stroud & Swindon building societies.

Yorkshire has a loan at a variable rate of 6.74 per cent discounted by 3 per cent for four months. There are no redemption penalties. Stroud and Swindon has a fixed-rate flexi-loan at 6.29 per cent for two years with no penalties.

Generally, rates on flexi-loans are a little higher than on standard mortgages. So if your priority is debt repayment and not flexibility, you may do as well with a low-cost repayment loan.

Halifax's IF product promises the best of all worlds, but much will depend on the rates it offers on the individual components, says Bunton.