Flexible Mortgages

If you like the flexibility to pay your mortgage your way, you’ll love having a flexible mortgage. Having the flexibility to overpay, underpay, or even not pay gives you complete control over your finances month on month. It means you can budget for the better things in life and still allow for the unexpected. It’s the best of both worlds: infinitely adaptable and utterly dependable.

So how do you negotiate a flexible mortgage? That depends: particularly on the degree of flexibility you want, and on the type of scheme you’re investing in. Some lenders will offer full payment flexibility across the board. That means you can choose a flexible fixed rate mortgage, flexible tracker rate or flexible discount rate. You can take any mortgage you like and make it flexible!

But the ways in which lenders offer this sort of flexibility vary enormously and the question of what constitutes a truly flexible mortgage is still open to debate. That means you will have to liaise with your broker and negotiate with your lender to secure the deal you need. Some schemes offer flexibility within pre-set parameters, whilst others go the whole hog in giving you an infinitely adaptable service.

For some, flexibility means having the option to make an additional payment on top of your required payment each and every month, making for a more regulated kind of flexible scheme. Some lenders will impose a small charge, some won’t. Although it’s less overtly flexible than a flexible offset mortgage scheme, it does still give you all the advantages of early payment and reduced interest charges. And this is just the beginning: further flexible schemes are appearing all the time, capitalising on our increasing need for mortgages that satisfy our wildly varying requirements.

Of course you don’t just need the flexibility to overpay, but the flexibility to underpay; and even, on occasion the latitude to forego payment altogether for a month or two. Whether or not you’ve been making scheduled or unscheduled overpayments, you can give yourself the occasional month off. But whether or not you incur a charge for the privilege is again dependant on the individual requirements of your chosen scheme. In most cases you will need to inform the lender of your intention to underpay or temporarily suspend payment, thereby ensuring that you’re not penalised for an unplanned deviation in your agreement.

As we said, the offset mortgage remains one of the most popular ways of taking absolute control over your repayments, and is perhaps the easiest. Whether you want to overpay or underpay (without ever incurring any charges) you can simply ‘offset’ your mortgage against the money in your savings account. An offset mortgages is actually an excellent way of simplifying your entire financial management process and of reducing your interest payments on credit cards, store cards and miscellaneous loans too.

By placing all of your savings and loans in one account you only ever have one sum of money to worry about. All your existing loans will be charged at the same low rate of interest as your mortgage, thereby saving you money. All your accumulated savings will be offset against the value of the outstanding interest on your mortgage, reducing the interest charged on your mortgage, and thereby saving you more money!

Because an offset mortgage works like your current account, it means you get complete flexibility to pay in to it, take out of it, and to manage your mortgage in the way that best suits you. For example, you don’t just get the opportunity to stop payments; you can actually suspend them for upto six months in some cases. Just ask your lender for details…

Whatever you want of a mortgage, a flexible mortgage gives you the power to take it, shape it and make it your own.