Flexible Mortgage

A flexible mortgage is a type of mortgage that provides more repayment options. For example, you may have the option to make substantial overpayments or pay varying amounts each month, offering greater flexibility compared to a standard mortgage.

It’s important to note that different providers may have their own definitions of a flexible mortgage.

Flexible mortgages can vary from lender to lender, so the term doesn’t always have the exact same meaning. The most common options include:

Overpayment
Overpayment allows you to pay more than your standard monthly repayments. This can help you clear your mortgage quicker and reduce the overall amount of interest you pay. However, it’s important to check if there are any limits on how much you can overpay, as you may incur charges for exceeding these caps.

Underpayment
A lender may agree for you to make reduced monthly payments for a specific period of time. Typically, lenders only grant this option if you have made overpayments in the past.

Payment holidays
Some lenders offer the option to temporarily suspend monthly payments for a specific period, typically ranging from one to six months. It’s important to note that interest will still accrue during this time, resulting in higher overall mortgage costs over the loan term.

Drop-lock
If you have a tracker mortgage, a drop-lock feature allows you to switch your mortgage to a fixed rate without incurring any early repayment charges or needing to remortgage with another lender.

Borrow-back
The borrow-back feature enables you to withdraw any excess money you have previously paid if you need it. This convenient option allows you to save on interest payments and use your flexible mortgage as a form of savings account.

Daily interest calculations
The interest you owe is calculated daily, meaning that any payments you make are immediately taken into account. This method is much more cost-effective compared to other ways of calculating mortgage interest, such as monthly or yearly. If you choose to overpay, for example, your interest payments will decrease immediately.

What makes a Flexible Mortgage a good option? Here are some benefits:

• More flexibility to overpay, underpay, or even take a break from mortgage payments.
• Ideal if your income fluctuates, such as if you’re self-employed.
• Can help you pay off your mortgage faster and save money.

There are some disadvantages to be aware of when considering a Flexible Mortgage, including:

• Flexible mortgages generally have higher interest rates compared to standard mortgages.
• Different lenders may have varying restrictions and terms and conditions.
• There are likely to be limits on both underpayment and overpayment amounts.

Why Best 4U?

As an independent mortgage broker, we are only interested in getting the best deal for our clients! We work with a wide range of lenders and can view the whole of market, with your goals and dreams in mind we can help you to get the deal that is Best 4U!