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Flexible Mortgages

There are many varying degrees of flexibility. In order to be truly flexible, a mortgage must allow borrowers to do the following:

Overpay
Underpay
Take Payment Holidays
Borrow back overpayments
Carry no Early Repayment Charges
Calculate interest daily

Some so-called flexible mortgages may only meet a couple of these criteria, while other all-singing, all-dancing mortgages allow you to do much more. So let us do the research for you and we can recommend the deal that suits you best.

Overpaying

The vast majority of flexible mortgage borrowers make overpayments on their mortgages. This may seem like a strange concept, but it makes great sense. If you can get rid of your mortgage early you can save yourself tens of thousands of pounds in interest payments. So if you can afford to make some overpayments why not do so? And overpaying by very small amounts can help.

Underpaying

A truly flexible mortgage will allow you to pay less than the agreed amount - once you have made overpayments. Of course underpaying is not the best idea as it adds to the time it will take to pay off your debt, but it could come in handy in the odd month when your spending is increased.

Payment Holidays

Some flexible mortgage deals allow you to take a complete break from making mortgage payments for up to a year. This could be useful if you're thinking of starting a family, taking a sabbatical or even going on the cruise of a lifetime. Of course, you will still have to pay back any amount missed during a payment holiday and the terms and conditions will vary. Some mortgage lenders may only let you take a couple of months' payment holiday each year. So check first if you think you might want this option.

Borrowing Back

Borrowing back overpayments you have made makes perfect sense if you need extra cash. The beauty of mortgage overpayments is that rather than putting any spare cash into a savings account and earning a couple of percent interest on it, because the amount you over pay is taken off your mortgage you are effectively earning the mortgage rate on your savings. And, with the borrow back facility, it's as though your money was in an instant-access savings account earning that rate. So if you want to buy something costly, or you run into unforeseen expense, the money is at hand.

Early Repayment Charges

Early Repayment Charges do not apply to regular standard variable rate loans - you should be free to chop and change between variable rate loans when you choose as they are not the most competitive rates available. When flexible mortgages were first introduced you could only get them on variable rate loans, so Early Repayment Charges did not apply. Plus while a traditional mortgage lender could charge you a fee if you wanted to pay off a lump of your mortgage (because they had calculated for you paying interest on that lump for a set number of years), that flew in the face of the flexible concept, which actively encourages people to pay off their mortgages as early as possible. Now there are some deals that are truly flexible but do carry short-term Early Repayment Charges. These may be fixed rates or discounted rates, where Early Repayment Charges apply during the special rate period.

Calculating Interest Daily

Fully flexible mortgages have interest calculated daily, and any payments and overpayments are credited to your mortgage account as soon as they are paid, so you are immediately paying interest on a smaller amount of debt. This saves you money in interest charges that would otherwise add up to a significant sum over a number of years.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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Typically a fee of £495 will be charged upon mortgage application but the exact amount of this fee will be dependent on your circumstances. Please contact us for full details.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Select Mortgages Solutions,
Regents Pavillion,
4 Summerhouse Road,
Northampton,
NN3 6BJ

Tel: 0845 22 42 162
Email: info@selectms.co.uk

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Select Mortgage Solutions is an appointed representative of Stonebridge Mortgage Solutions Limited which is authorised and regulated by the Financial Conduct Authority.
 
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