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Mortgages Expert Guide

Flexible Mortgage

Flexible Mortgages are quite a new innovation in the UK and are designed to offer you the ability to change your monthly payments to suit your ability to pay. Though there is no precise definition of a flexible mortgage it is generally considered that they should offer:-

  • Interest calculated on a daily basis
  • The facility to make overpayments at any thime without incurring an early repayment charge
  • The facility to underpay, but only based on certain criteria set out by the lender from the outset and usually involve you having made overpayments previously
  • The facility to take a payment holiday, again based on criteria set out by the lender from the outset and usually involve you having made overpayments previously

There are flexible mortgages available with the benefit added benefit of fixed rate, discounted rate or tracker options, though like these stand alone options you will usually incur early repayment charges if you settle within the offer period.

Flexible Mortgage Pros

  • The combination of daily interest calculation and overpayments can result in less interest being paid overall, which could reduce your mortgage term significantly.
  • The ability to overpay and underpay is ideal for someone with varied pay


Flexible Mortgage Cons

  • Flexible Mortgages do not always offer the cheapest interest rate, as you are paying slightly more for the level of flexibility.

 

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