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The best flexible mortgage UK is the one that works with the needs of the individual borrower. Flexible mortgages are home loans that allow some deviation from their repayment schedule and allow underpayments, overpayments, repayment holidays and interest charged on a frequent basis. This article will look at each aspect of a flexible mortgage and highlight what makes the best flexible mortgage UK deal.

Overpayments

The vast majority of flexible mortgage borrowers make overpayments on their mortgages. The earlier that you make the extra payments in your mortgage term, the earlier your mortgage will be paid off. Even by making slightly higher monthly repayments will enable you to repay your mortgage loan quicker. For example, on a £70,000 mortgage charged at 6.2%, giving up your weekly large latte at £2.80 and putting that money towards your mortgage instead, would pay off the mortgage 1 year and 5 months early!

Some flexible mortgage lenders state a minimum overpayment of £25 per month and a maximum overpayment of 10% of the outstanding balance on completion.

Overpayments can also be made by lump sum payments on an ad hoc basis.

The best flexible mortgage UK is one that allows you to overpay at any time without penalty.

Underpayments

Underpayments can occur when you have made some overpayments. The underpayment option of a flexible mortgage is useful if, for example, your finances have become stretched. You can then choose to underpay for a few months until your finances have settled down.

The best flexible mortgage UK deal allows underpayments straightaway.

Payment Holiday

Some flexible mortgage deals allow you to take a complete break from making mortgage payments for up to a year. This could be useful if you’re thinking of starting a family or taking a sabbatical. You have to have built up sufficient overpayments to cover the period you take off and some mortgage lenders may only let you take a couple of month’s payment holiday each year

The best flexible mortgage UK deal allows you to have payment holidays for up to a year.

Borrowing Back

Borrowing back overpayments, instead of taking out a loan, makes sense if you need extra cash for any reason. You often have to build up a reserve of overpayments against which you can borrow and there will probably be a ceiling on the overall amount you can borrow through your original mortgage. The great aspect of mortgage overpayments is that rather than putting any spare cash into a saving account and earning a small rate of interest, the amount you overpay is taken off your mortgage so you are effectively earning the mortgage rate on your savings.

Some flexible mortgage lenders let you withdraw overpaid money directly using a cheque book or a debit card and others let you borrow money as the value of your property increases.

The best flexible mortgage UK deal allows easy access to funds.

Interest Charges

Unlike some traditional mortgages that still charge mortgage interest on an annual basis, flexible mortgages are calculated on a monthly or daily basis. This means that any overpayments you make are quickly credited against your loan, so you are immediately paying interest on a smaller amount of debt, thereby saving you money in interest charges.

The best flexible mortgage UK deal calculates interest on a daily basis.

Conclusion

The modern mortgage market has become more liberal and creative, and therefore this has led to an increase in the choice and range of flexible mortgage packages being offered to borrowers. Due to so many flexible mortgages to choose from, an independent mortgage broker can advise you on the best flexible mortgage UK deal for your needs.

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