Flexible Mortgage
mortgage glossary
In recent years, lenders have introduced flexible mortgages to allow you to vary your monthly repayments. Generally speaking you have the option of overpaying, underpaying, or even taking a payment holiday. The obvious advantage of overpaying, for example, is your outstanding loan will reduce more quickly, saving interest.
If your circumstances change and you might have the need to pay less. The advantage of a flexible mortgage is you won't be penalised in these circumstances. But if you wish to make an underpayment you'll only be allowed to do so as long as overpayments have previously been made.
From a practical standpoint the flexible mortgage can offer a combination home loan and current account rolled into one. So, if you take out say a £75,000 mortgage, and then you win £10,000 on the premium bonds, you can simply, without penalty, reduce the size of your mortgage.
Flexible mortgages often come with cheque books attached. So conversely, if you suddenly need an extra £5,000, you'll be able to write a cheque and in the process increase the overall size of your homeloan to £80,000.
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