Flexible Mortgages
A flexible mortgage gives you some scope to change your monthly payments to suit your ability to pay. It's also useful if you want to pay off your loan more quickly. Several flexible features are becoming common and they aren't limited to mortgages with 'flexible' in their name. Here are some flexible features:
- Overpayments - you can pay more than your normal monthly mortgage payment or pay off a lump sum, or both.
- Underpayments and payment holidays - you pay less than the normal monthly payment for a limited period (say six or twelve months). You may even be able to stop making payments altogether. This could be useful if, say, you lose your job or take time off to care for a child.
- Borrow extra (loan drawdown) - you can borrow extra without further approval from your lender, provided the total loan does not go above an overall limit. Alternatively you may be able to 'borrow back' against earlier overpayments.
Is a flexible mortgage right for you?
Possibly, yes, if you are likely to use these features, for example if you're self-employed and have a variable income.
Possibly not, if you are unlikely to use these features. A less flexible mortgage may be cheaper or more suitable for you.
This product normally is subject to interest usually being calculated on a daily basis. A downside is that it would not always provide the most competitive rate.