flexible

What is it?

With a flexible mortgage you can make extra payments, borrow back money, take payment holidays and make underpayments without incurring any penalties. Interest on flexible mortgages is generally charged on a daily basis, so you don’t pay interest on money you’ve already paid back.

Flexible mortgages are usually charged at the variable rate in between a discount rate and the lender’s standard variable rate (SVR). Interest only and repayment options are available.

What does it offer?

A flexible mortgage could enable you to pay your mortgage off early without penalty.

If your financial situation and lifestyle change, you can adjust payments up or down to suit your new circumstances.

Some flexible mortgages also offer a current account banking facility.

When is it worth considering?

For the majority of people, who have fairly predictable income and outgoings, it can be hard to justify a flexible mortgage. However if, for example, you are self-employed with large cashflow movements, or receive sizeable commission or other bonuses from your employer, a flexible mortgage could be worth considering.

What should I be aware of?

There are lots of conventional mortgage products which also let you overpay a certain amount per year, and at a lower interest rate. So if you want to pay off your mortgage early there may be more effective ways of doing it.