Guide to Flexible Mortgages UK

Flexible mortgages are designed to allow variations in the amount people pay in their monthly repayments. For example most flexible mortgages allow borrowers to pay more back, thus enabling you to pay of the mortgage early. Also flexible mortgages often allow scope for a payment holiday. This is when with the agreement of your lender, you can avoid making payments for up to 6 months. However this will mean higher interest payments in the future. Other features of flexible mortgages might include:

  • Payment per 4 weeks leading to 13 annual payments rather than 12.
  • Ability to withdraw cash from mortgage, usually related to previous overpayments
  • Reducing payments during times of financial hardship

Advantages of Flexible Mortgages

  1. Suitable for self employed people who have a volatile source of income
  2. Can be useful in times of hardship e.g. for a couple having a child, one can stop payments.
  3. If your income is better than expected you can use it to pay off your mortgage early allowing lower interest payments

 

Disadvantages of Flexible Mortgages.

  1. Deferment of payments may lead to financial problems merely being delayed.
  2. If payments are deferred it will involve higher payments in the long term.
  3. If you are unlikely to use the features of overpayment followed by underpayment. Then this mortgage is probably not the best solution because you should be able to find a cheaper standard mortgage.

Often Flexible mortgages are known under commercial names such as

  • Personal Choice mortgages
  • Open Plan Mortgages
  • Freedom Mortgages

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