Why you need a flexible mortgage!

John Fitzsimons explains why the best mortgages offer you a bit of flexibility

Mortgages take an awful long time to pay off, so it can be pretty useful to secure one that offers you a bit of flexibility in terms of how you are going to pay it off. This is particularly true if your pay tends to be variable, for example if you rely on an annual bonus.

However flexible features can be handy for all of us!

#1 Overpayments

The main flexible feature that most mortgages offer is the option to overpay by up to 10% without being charged.

This is definitely a smart thing to do if you can afford it. Firstly, it allows you to build up your equity stake in the property quicker, which will help to protect you from negative equity should house prices start to fall.

It will also save you money in the long run as you’ll pay your mortgage off quicker, thereby saving you thousands in interest payments!

#2 Underpayments

If circumstances change, your mortgage payments can start to look a bit painful. However, some mortgages actually allow you to pay less than you should on your mortgage repayments for a couple of months.

It’s worth remembering though that this feature is generally only available if you have already been overpaying on your mortgage previously – yet another reason o pay a bit more when you can!

#3 Payment holidays

Of course, in some instances, underpaying won’t be enough – you’ll need to put your payments on hold completely.

As the name suggests, a payment holiday is when you get to take a few months off from paying anything towards your mortgage. How long you can take off varies depending on the lender, though you’ll have to provide a good reason for taking a payment holiday. Typical reasons include maternity leave, a change of employment and an exceptional or unforeseen household expenditure.

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