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 homeloan 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.

Get professional help from a qualified independent mortgage advisor and see how much you could save on your mortgage payments. There's no obligation, just plain good advice.

See also: Financial Services, Mortgages