Flexible Mortgage

The Deal:

There are a number of limitations to the standard types of mortgages available if your income is erratic, for example if you are self employed or perhaps working on short term contracts. Flexible mortgage rates overcome this problem by allowing the borrower to make both over and underpayments into the account. The interest is most likely to be calculated daily meaning that you will see an immediate impact of any overpayments that you make.

Advantages:

  • Monthly payments can adapt to the level of monthly income you receive.
  • Interest is almost always calculated on a daily basis
  • In the long term you should see a reduction in the amount owing quicker than with a standard mortgage.
  • With enough credit you can take a payment holiday
  • Flexible mortgages may allow you to operate your mortgage account as a bank account
  • The option to make withdrawals

Disadvantages:

  • Generally you will be unable to obtain fixed, discounted, capped or cashback rates
  • Lack of discipline in monthly payments could result in a badly managed mortgage account

Suitability:

The flexible mortgage option is suitable in a number of circumstances the most common being those identified below:

  • Self employed or contract workers
  • Individuals looking to make lump sum payments as a result of anticipated bonus payments or salary increase
  • Borrowers with larger loans
  • Those who wish to have speedy access to a pre-agreed credit limit

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