A flexible mortgage provides an opportunity to tailor the mortgage to suit your needs. For example, you may overpay, underpay and in some cases temporarily suspend monthly mortgage repayments according to your financial situation.
What are the features of flexible mortgages?
Unlike traditional mortgage offerings, flexible mortgage providers
now offer many products to suit the borrower. A flexible
mortgage will allow you to pay off your mortgage earlier, calculate
interest charges on a daily basis, make higher monthly payments,
make lower monthly payments, take payment holidays where no payments
are made and no penalties are incurred.
Some flexible mortgage providers will even allow you to borrow back money that you have already paid, and sometimes this can prove to be another cost effective method of borrowing money to other types of conventional loans.
Why does everyone not have a flexible mortgage?
In order to have a flexible mortgage that is packed with many features and benefits the provider will charge you for the privilege. It is not common for flexible mortgage products to bear higher interest costs. These will vary from provider to provider.
Why consider a flexible mortgage?
Not only can a flexible mortgage suit your changes in circumstances
but they can save you a lot of money. Mortgages are underpinned
by two key factors which are the repayment terms and the interest
rate applied to the loan.
If a flexible mortgage allows you to impact any of the above mentioned then will work in your favour. Having the facility to make monthly overpayments will most certainly reduce the total cost of the mortgage as you will save hugely on interest charges.
Types of flexible mortgages
Mortgage lenders are forever adding new variations and flavours of mortgages and flexible mortgages are no exception. Be prepared to see flexible fixed rate mortgages, flexible discount rate mortgages and flexible tracker mortgages. Most of these products are based on standard type mortgages but combined with flexibility such as ability to make overpayments.
The advantages of a flexible mortgage
- Flexible mortgages allow the borrower to potentially make huge financial savings.
- Allows overpayments which could help you pay off your mortgage early.
- Payment holidays can be used if your circumstances change for example starting a family.
- Allow you take charge of your finances
- Interest rates can be calculated daily so any overpayments are taken into consideration immediately and not at the end of year.
The disadvantages of a flexible mortgage
- Many lenders will put restrictions on how much overpayments can be made.
- Some flexible mortgage products will bear early redemption charges.
- Interest charges can be higher than other mortgage products and types.
- Some providers may not offer daily interest charges
Where can I get a flexible mortgage product?
We can put you in touch with our FSA regulated mortgage brokers by filling in the form below: