Flexible Remortgage - Remortgage, Secured, Buy To Let
When mortgages first came to the UK market, the choices were extremely limited.
Customers simply had to choose a variable rate, and the actual rates offered were not anywhere as competitive as they are today. Flexible Mortgages were deemed as more suitable for those customers who had experience of being homeowners, and could manage their money, rather than first time buyers.
However, as these mortgages have evolved, the benefits to the customers have adapted and now a lot of first time buyers realise these benefits.
Flexible Mortgages, as the name suggest are designed to be flexible and give you greater control of your monthly finances. However there are different degrees of flexibility, and each lender is different. The main benefits of flexible mortgages are that you can overpay on your monthly payments, borrow back money from the overpayments, underpay on your mortgage payments and take payment holidays and breaks. Most customers that choose a flexible deal, overpay as much as they can, so that the loan is paid off quicker, thus incurring less interest charges. However, a genuinely flexible mortgage will also allow you to make underpayments, which is perhaps the main reason a lot of first time buyers are attracted to such deals. This can be useful when you have periods throughout your mortgage when you have additional outgoings. Most lenders however, will only allow underpayments, if overpayments have previously been made.
Payments to suit you - the main advantage of a flexible mortgage is that you can vary your payments to adjust to your current financial. For example, a new family with childcare costs for the first time could find the underpayment facility a great help. Similarly those older couples, who now have more cash available, could overpay and become mortgage free much quicker.
Clear your debt quicker – by making regular overpayments, you are able to repay the loan before the end of the term. This alone could save you thousands in interest payments. According to the HSBC a £100,000 mortgage over 25 years, with an overpayment at £150 a month, would save £33,180 in interest payments and the mortgage would finish 8 years and 4 months early.
Bonus payments saving interest – should you receive a bonus or salary payment in a bonus sum, then your flexible mortgage is the perfect place for it. The interest saved on your mortgage long term, is highly likely to outweigh the amount you would normally receive from a regular savings account.
Most mortgage lenders in the UK now offer some form of flexible mortgages deals. You are now able to get flexible fixed, discounted and tracker rates. All lenders offer a mortgage calculator facility that will illustrate how much the initial mortgage or remortgage will cost to set up, with more detailed personalised illustrations highlighting how under and over payments will impact upon the loan.