Flexible Mortgage Comparison | Important Factors To Consider

When it comes to making a flexible mortgage comparison, there's more to do than simply look at the headline interest rates. An offset mortgage that starts at around 2 per cent may seem like the best deal in a flexible mortgage comparison, but there's always the question of how long that rate actually lasts. Some of the seemingly cheapest offset mortgage rates are only available for a period of six months. After that, the rate reverts to a higher interest rate so a new flexible mortgage comparison might find that there are better deals available.

Another issue in a flexible mortgage comparison is how much it will actually cost to borrow the money over a given period. Unless home buyers go to a comparison site or professional mortgage broker, they will rarely have access to this measure as many lenders do not include the fees in their flexible mortgage comparison figures. But booking fees, arrangement fees, higher lending charges, money transfer fees and other fees are a normal part of getting an offset mortgage. Since you won't get a flexible mortgage without them, they should be part of a flexible mortgage comparison. Adding these up can give a better measure of what a particular flexible mortgage deal will actually cost the homebuyer.

The Sting In The Tail

And then there's the sting in the tail. With a flexible mortgage comparison it's also essential to look at what happens when you want to end the mortgage. Most homebuyers change mortgages and houses several times throughout their lives, so the cost of getting out should be considered in any flexible mortgage comparison. This can range from early repayment charges which are a percentage of the amount repaid or owing, to a certain amount of interest, and it's almost certain that exit fees and administration fees will be added as well. If you know you might change your offset mortgage lender within a couple of years, then this is a key issue in any flexible mortgage comparison.

Money aside, no flexible mortgage comparison would be complete without a consideration of the range of flexible features available and how easy it is to use them. Most home buyers are concerned with overpayment, underpayment, payment holidays and early repayment. Flexible mortgage providers differ considerably in the way these are handled. A flexible mortgage comparison reveals that some offset mortgage lenders allow unlimited overpayments, while with others repaying over a certain amount will incur early repayment charges. Some lenders allow long payment holidays; while others place restrictions on how borrowers qualify for these and how long the payment holidays can be. For example, with some offset mortgage lenders, borrowers can miss one payment every year. With others, payment holidays of up to six months can be negotiated. However underpayments and payment holidays could increase the mortgage term and/or the total amount payable.

Borrowing Back On A Flexible Mortgage

As well as all the money paid out, a flexible mortgage comparison must consider how lenders handle the issue of borrow back - that's when you've overpaid and you want to get back some of your money. Again, this is easier with some lenders than with others. Depending on the type of flexible mortgage account, getting your money back may be as simple as withdrawing it from the ATM. However, in other cases it can require an application to the offset mortgage lender.

All of these features will directly affect your pocket and the management of your offset or flexible mortgage. That's why it's essential to consider these factors in a flexible mortgage comparison.

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