Flexible Home Loan | Research Report Reveals Popularity Increase

The Flexible Home Loan Research Report

It's official - the flexible home loan is increasing in popularity with UK consumers. A recent research report polled intermediaries (people who work with consumers but do not lend directly) on their view of the offset mortgage market. The survey of 1,400 intermediaries was conducted by Nationwide Building Society's specialist lending subsidiary UCB Home Loans*.

The research found that flexible mortgages are in demand. Some 69 per cent of intermediaries found that the number of requests for a flexible home loan had increased in the last year. With a flexible mortgage, borrowers can make payments according to their particular financial circumstances. Most flexible home loan providers allow flexible mortgage holders to overpay, underpay and take payment holidays. However underpayments and payment holidays could increase the mortgage term and/or the total amount payable. Some flexible mortgage providers even allow customers to repay the flexible mortgage loan early without charge.

Tracker Mortgages Gain In Popularity

The research suggested that the flexible home loan was particularly suitable for homeowners with fluctuating income, citing landlords and the self-employed as examples. The research found that borrowers particularly liked a flexible mortgage with a tracker option, as 32 per cent of intermediaries said flexible tracker mortgages were even more popular this year than last. And a tracker mortgage is still likely to be the mortgage of choice next year, according to 71 per cent of intermediaries. Meanwhile 84 per cent said the two year tracker flexible home loan is the most popular product among UK borrowers.

But a tracker flexible home loan is not the only product out there for UK homeowners and first time buyers. There are plenty of providers who offer flexible home loans with an initial discount and a fixed rate period. This might be more suitable for borrowers who want to know exactly what they will repay on their flexible mortgage each month. And don't forget to consider capped offset mortgages. Even though they are few and far between, it could be useful to know that you'll never have to repay more than a certain amount each month.

Rate Rise On The Cards

With the Bank of England's interest rates being volatile at present it may be time to consider a flexible home loan and repay your mortgage early. Who knows where interest rates are heading? you can get varying views from different financial analyst - who is right, who is wrong? so looking for an flexible deal might save you a lot of money in the long term. An offset tracker mortgage offers the potential for big savings on your mortgage.

Whether it's a month of bills or bonus, flexibility offers some advantages, though borrowers should check the terms of their flexible home loan very carefully. Those who are expecting Christmas bonuses will need to make sure there's no charge if they decide to pay of 10 per cent of their mortgage in the new year. And those who are planning to underpay their flexible home loan to give themselves some additional money for a New Year shopping spree also need to be careful. Too many underpayments will make lenders wonder if you can pay, so be sure to manage your flexible home loan wisely.

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