A flexible mortgage is designed to give you more control over your finances with varying degrees of flexibility.

These products give the option to overpay, borrow back overpayments, underpay and take payment holidays. The features and the way they work will differ between providers. Therefore when looking at products you should ensure they have the particular features that you require.

What do flexible mortgages offer?

Overpayments

This means you have the choice of making additional payments on top of your monthly sum. By doing this you will be reducing your overall balance and saving money from the interest you will not have to pay.

Underpayments

Just like you can pay more each month, you also have the option to make a payment lower than your normal monthly sum. The amount and duration of underpayment will have to be agreed prior with the lender.

Payment Holiday

As a contractor you might want to have the ability to take a break from your mortgage payments. Some products offer the option to take one to six months off from paying your mortgage.

Daily Interest

The interest on your mortgage will be calculated daily with a flexible mortgage. As a result, the overpayments you make will be accounted for instantly and will positively affect the amount to charge tomorrows interest on.

Advantages of a flexible mortgage

  • Monthly payments can fluctuate depending on what you can afford
  • Some allow you to take payment holiday, where you can choose not to make payments for up to six months
  • Your interest will be calculated daily, which is the least expensive way compared to monthly and yearly calculations

Disadvantages of a flexible mortgage

  • Payment holidays may increase your repayments in the future, or prolong your loan period
  • If you lack discipline you may struggle managing your mortgage account