Flexible Mortgage Guide

Flexible Mortgages have evolved on from the traditional UK mortgage model. A flexible mortgage is adaptable to fit your individual circumstances which means you can overpay, borrow back any overpayments, underpay and take payment holidays.

Most flexible mortgage deals allow you to change to another mortgage type without penalty. Your interest outstanding is calculated daily which means that as soon as you make a payment the residual interest due is immediately less.

The flexible mortgage was first successfully trialed in Australia in the early 1990's. In 1995 a couple of mortgage lenders realised that it would be a perfect fit for many people in the UK who had irregular work and lifestyle patterns.

Up till this time, borrowers had to choose from variable or fixed rate deals with no flexibility whatsoever. Penalties would often apply if payments were not made on time or if one wished to make an extra capital payment.

Now flexible mortgages are a well-established and accepted form of borrowing that allows the homeowner to have more control over his or her finances. There are of course varying degrees of flexibility on offer from providers, so carefully think about what kind of flexibility you require when you compare flexible mortgage products.

A new, popular form of the flexible mortgage is the offset mortgage. This is where interest on your mortgage is reduced by the funds in both your savings accounts and your current accounts. Even more evolved are flexible offset mortgages that bring together your mortgage, current account, savings account, loans and credit cards. The effect this kind of holistic financial arrangement can have on your personal finances is amazing.