Flexible Mortgages

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A Flexible Mortgage

A flexible mortgage is exactly what is says, flexible. According to your financial ability to repay the loan, both underpayments and overpayments are allowed. An example of this would be if you receive a bonus from your job, you can apply it to your mortgage. This will aid you in paying off your mortgage at a more rapid pace. On the other hand, if you are short on funds, you may be allowed to take a payment holiday or even borrow money back. Each lender has different policies on how this works.

As with any loan, the faster you repay it the less interest payments you make. Making a large amount of underpayments is not advisable. The longer you drag your mortgage out, the more interest you end up paying. Generally the interest rates on flexible mortgages are calculated on a daily basis, making it much easier to see the difference made from making overpayments.

Lenders have separate policies and procedures on overpayments and underpayments. An example of this is a lender may not allow you to make an underpayment if you have never made an overpayment.

The self-employed, contract workers and company directors of limited companies are the ones that most benefit from flexible mortgages.