Mortgages

Flexible Mortgage Guide

There are different types of flexible mortgages and not all offer the same benefits. To be fully flexible they should have features such as Payment Holidays and a Borrow Back Facility. You should be looking at having the ability to make over payments on the mortgage.

Over paying even the smallest amount each month will save you thousands of pounds over the period of the loan. If you save £2 per day on an average mortgage it would cut the overall debt by £20,000. Likewise the ability to make under payments could be useful if you know that you are about to enter a period when more cash is required to fulfill your other financial commitments.

Payment holidays

You may have needed to have built up a buffer of overpayments to enable you to take holidays. Some lenders set a limit on the amount of holidays you are allowed to take whilst others do not.

You may also wish to borrow back funds at some point and a truely flexible mortgage would allow you to do this as long as you have made enough over payments, you may be able to access the money with your own check book or Switch/debit card.

With this type of mortgage there are no redemption penalties if you decide to repay the loan back early. Some lenders will, however, set a limit on the amount you are allowed to repay each year.

 

Offset Mortgages

This flexible mortgage operates with the borrower keeping a number of accounts such as a personal loan or credit card with the same lender. When the lender calculates how much interest you owe on your mortgage it takes into account these other areas. Any savings reduce the amount you owe whilst any debts are added to your mortgage and charged at the mortgage rate.

Current Account Mortgages

Your bank account and home loan are combined in this flexible mortgage. Your salary is paid into the account each month and this allows you to maximise the advantage of daily interest calculations.

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