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Flexible Mortgages
Lenders offer a range of different flexible mortgages in the UK, but the general features on offer are as follows:
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Change the regularity of your repayments
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Make under or over repayments
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Take repayment holidays
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Borrow back some of the loan capital
With the greater flexibility comes a slightly higher than average interest rate charge, but this is often recalculated on a daily basis.
The main advantage of a flexible mortgage is that you have the ability to repay the mortgage capital early and save on interest rate charges. Many flexible mortgage interest rates are calculated daily meaning you make savings almost instantly after you make a capital repayment. In the same way, if you borrow back, you will be paying a larger interest rate straight away, if interest is calculated daily.
The advantage of being able to borrow back is that you can make use of the equity in your home, if it has increased. This may be a cheaper way to borrow compared with an unsecured loan.
The flexible mortgage has become one of the most popular ways of mortgaging in recent years. Lenders are increasing the flexibility and range of their mortgage products regularly to suit consumers. Some lenders offer a service where by the borrower combines their flexible mortgage with their current account.
Lenders often use their flexible mortgage deals to attract custom from mortgage holders looking to
remortgage.
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