flexible mortgage

What is a flexible mortgage?

Ooooh lets stretch!

A mortgage that gives you the freedom of how you repay the property loan

Options can include:

Take a payment break

Borrow money back

Interest rates can be calculated daily

Overpayment option

Underpayment option

Let us just break this down a little further to avoid any confusion:

1.  Payment breaks: this gives you the ability to freeze payments for a month or two – great if you are anticipating a dip in your income. Be aware interest is still charged during your break, and you will need your lender to approve a freeze in payments which is deemed more acceptable if they have evidence of overpayments.

2. Borrow back: If you have overpaid during your mortgage term, some company lenders will allow you to borrow back. Now the purpose of overpaying is to reduce interest, but if you needed money to pay for something unforeseen this flexible option allows you to release funds you have already put toward your mortgage. This is actually a good way to say money because there is a reduced rate of interest overpaying into mortgage as the interest is usually greater than paying into a savings account.

3. Interest calculated daily:  Having your interest calculated daily works out less expensive than paying for interest monthly or yearly. The interest calculation worked out for the next day is calculated off your reduced payment, paid the day previous. If you can overpay one day this works out even better for the interest you pay as it has a direct lowering impact on your next daily charge.

4. Overpayment: this means you are paying more than the agreed amount. Most people will pay a lump sum if they have any spare money to reduce the overall sum with the intention of lowering interest rates

5. Underpayment: an under payment needs to be agreed by a lender and is usually agreed on a period where you have overpaid enough you cover a period of under payment