Flexible Mortgages Information

Flexible mortgages allow your monthly payments to change depending on how your cash flow changes in cashing, paying some of the capital back early (overpayments), taking some cash out that you have already paid in, or making underpayments or deferring payments.

Flexible mortgages are common mortgages for people that have the opportunity to make regular overpayments and, as a result, can pay less in interest overall.

Your eligibility for a flexible mortgage depends on your own credit history, incomings and outgoings.


Flexible mortgages advice from WPP Financial Services, Rochester, Medway, Kent, could help with this.


 

It is often beneficial to have flexible mortgages with the mortgage interest calculated daily; any payments can then be taken off the amount you owe and therefore reduce the total amount which you will pay interest on.  Any overpayments therefore will make a difference to your mortgage balance straight away.

Overpayment on flexible mortgages can be as a lump sum or as a regular amount.  If you choose to make regular overpayments these can be arranged as a Standing Orders or by changing the Direct Debit with the lender but can also be stopped at any time.  Overpayments are optional and you can stop making regular overpayments whenever you choose.

You should check the details with your lender as some terms from mortgage lenders may state that you have to pay an Early Repayment Charge if you overpay by too much.

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Flexible mortgages do have the option of allowing flexibility by giving the flexibility to take a payment break, maybe for a holiday away or to treat or if you want to carry out some building work..These tend to vary from 1 to 6 months but you will need to check with the particular lender. A payment break may also depend on previous overpayments made. Interest on the mortgage will continue to be charged while you have a payment break.

If you don’t want to go so far as take a complete mortgage break, you can also opt to underpay as allowed in your lenders terms and conditions and make a payment lower than your normal monthly amount.  Again this will usually depend on previous overpayments.

Some lenders allow you  to borrow back previous overpayment so you can take out money that you have previously overpaid and use this for whatever you want.

Some flexible mortgages come with portability options also.  This means you can take your mortgage with you when you move to a new property (after certain checks on the new property e.g. buildings survey).  This can save you money on early repayment charges but will depend on the value of the new property.

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Advantages & Disadvantages of Flexible Mortgages

Advantages 

  • You can make overpayments to pay off the mortgage faster
  • You can borrow back overpayments made
  • You can take payments breaks (subject to your lender)

Disadvantages

  • Interest will continue to be charged during any payments breaks so payments afterwards may be higher.

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