Flexible Mortgage
The term flexible, when used in the context of a mortgage, can
mean a variety of things.
In recent years, however, lenders have introduced flexible
mortgages into the market that allow you to vary your monthly
repayments. Generally speaking you have the option of
overpaying, underpaying, or even taking a payment holiday. The
obvious advantage of overpaying, for example, is your
outstanding loan will reduce more quickly. And this will cut
your monthly payments in the long run.
Conversely your financial circumstances may temporarily change
and you might have the need to pay less. The advantage of a
flexible mortgage is you won't be penalised in these
circumstances. But if you wish to make an underpayment you'll
only be allowed to do so as long as overpayments have previously
been made.
While a dozen banks, building societies and insurance companies
currently offer these types of loans it's worth noting that
terms and conditions will vary from lender to lender.
From a practical standpoint the flexible mortgage can offer a
combination home loan and current account rolled into one. So,
if you take out say a £75,000 mortgage, and then you win £10,000
on the premium bonds, you can simply, without penalty, reduce
the size of your mortgage.
Flexible mortgages often come with cheque books attached. So
conversely, if you suddenly need an extra £5,000, you'll be able
to write a cheque and in the process increase the overall size
of your home loan to £80,000.
A key point to consider is that if the mortgage is truly
flexible there should be no early
redemption penalties attached
it.
See also: Current
Mortgage Rates and Deals
It will only take a few minutes of your time today but
could save you thousands of pounds in interest payments and will
eliminate any worries you may have about getting the best mortgage deal
possible.
