Flexible Mortgages

The main features of a flexible mortgage are discussed in detail below.

Overpayments allow the borrower to pay more than specified amount of money required for the monthly repayment. There is no penalty fee for attempting to redeem the debt early and if you chose to pay off the entire mortgage in one transaction then no penalty fees will be levied for that either.

Underpayments allow the borrower to pay less than the specified amount of money required for the monthly repayment. There is no penalty fee for doing so but it would be reliant on there already being a surplus of money from previous overpayments and the authorisation from the lender.

Interest is calculated daily so that for every overpayment that the borrower makes it has an immediate effect on the outstanding debt. Whereas if it were calculated annually like other mortgages then the savings would be much less as the interest rate would be consistent throughout the year as apposed to it changing with every repayment. The drawback is that if the borrower were to make underpayments then the interest rate would increase, having the reverse effect by overpaying, and costing the borrower more money in interest.

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