Flexible
mortgages provide the borrower with a greater range of
repayment options, and according to some experts, they could save you money. Almost all of the top UK
lenders now offer flexible options for
mortgage loans. With a
flexible mortgage, borrowers are allowed to overpay and underpay on their
loan repayments, and in some instances are even allowed a payment holiday.
Experts have highlighted the fact that even a slight overpayment on a mortgage (prohibited in the case of many standard mortgage deals) consistently over the course of a
loan could save considerable amounts of money… not to mention cutting down the repayment term. Experts were also keen to point out that mortgage overpayment resulted in smaller interest payments overall.
Swap
rates, already falling due to buoyant expectation in the
money market, usually indicate interest rate change. It is widely expected that the Bank of England will cut
interest rates at some stage over the next few months. A further cut is expected for later in the year.
For this reason, holders of
fixed-rate loans (on which there are currently extremely good deals) could be at a disadvantage to people who have taken out flexible mortgages. The
savings made by
remortgaging or taking out a flexible or
tracker mortgage could leave borrowers with excess money to spend. This money could then be put to good use by overpaying…
saving you money in the long run.
