Flexible mortgages

Today’s flexible mortgages take many shapes and forms, with borrowers choosing from a host of exciting features and methods of rate control.  Although you tend to pay slightly higher interest rates for flexible mortgages, the benefits make this product the best mortgage choice for some.

Flexible mortgages originally came from Australia, with the intention of making mortgages more suitable for the different working lifestyles that were becoming popular, such as being self-employed or freelancing. The fact that with flexible mortgages you could take a payment holiday, or overpay and underpay was of obvious benefit for borrowers whose income varied each month.

Flexible mortgages have since become more sophisticated and have attracted other types of customers. Some borrowers opt for flexible mortgages because they wish to get rid of their mortgage quickly by making overpayments; some first time buyers are attracted to the flexible elements; other borrowers with large amounts of cash savings do well to take advantage of the offset mortgage – one of the many types of flexible mortgages.

It’s important to realise that not all flexible mortgages offer the same amount of flexibility. The minimum features that you should be offered are the ability to:

take a payment holiday
overpay or underpay
borrow back your overpayments
benefit from daily interest calculation
not be tied in by extended early repayment charges

Flexible mortgages take the form of many different types of products, with fixed rate flexible mortgages, discount flexible mortgages and tracker flexible mortgages all on offer.  It’s important to know exactly what the mortgage lender is offering and to take care to work out whether it will be worth your paying extra for these features. 

An increasing amount of traditional mortgage loans now include some flexible elements such as the ability to make overpayments.  So it may be that you can find one of the best mortgage rates on the market with the level of flexibility you require – without paying the higher interest rate of flexible mortgages.

When you speak to your mortgage adviser, mention which feature you are keen to have.  Your adviser can then work out if it’s cost effective for you to opt for a flexible mortgage.

see also:
Best buy mortgages
Mortgage calculators online
Free mortgage advice: our no broker fee policy
Understanding mortgages
Tracker mortgages
100% mortgages