Flexible Mortgages UK | Outlook For Flexible Mortgage Products

With flexible mortgages UK lenders have started a big business and it's only just beginning to grow. And while lenders are increasing their range of flexible mortgages UK consumers are increasing their demand for flexibility, which makes it a win-win situation for everyone. And the market is changing. Even with lenders who don't provide flexible mortgages UK borrowers can expect a range of flexible features.

There are around 50 providers of flexible mortgages UK homeowners can choose from, and the number is growing all the time*. All of the flexible mortgage lenders offer different deals and incentives, though there are many features they have in common. For example, hundreds of flexible mortgage and other mortgage deals now feature the daily calculation of interest. And on a wide range of standard mortgages and flexible mortgages UK lenders now offer the chance to repay a certain amount of the capital owed on the mortgage each year. Some allow borrowers to repay 5 per cent, others 10 per cent, and still others are fully flexible with no limit on repayments. With flexible mortgages UK consumers should check to see what they are allowed to repay and whether any early repayment charges apply, as these will affect the value of the flexible mortgage deal.

Flexible Mortgage Feature Choice

With other features of flexible mortgages UK consumers are likely to have a slightly narrower choice. There are usually more rules about underpayment and payment holidays. For example, some flexible mortgage deals stipulate that consumers can only underpay after having overpaid, while payment holidays are strictly limited. However, with some flexible mortgages UK consumers are able to take extended payment holidays for career breaks, maternity leave or other major life events.

Since consumers are asking for flexible mortgages UK lenders are increasing their range of offerings. Where once there were only tracker deals available, there are now fixed and tracker options, including long term fixed rates (such as the ten year deal offered by First Direct) and lifetime trackers offered by a number of flexible and offset mortgage lenders.

Offset Mortgages and Current Account Mortgages

Offset mortgages are the most popular of the new breed of flexible mortgages, with UK consumers preferring these to current account mortgages. Recent research has shown growth in the offset mortgage sector of more than 77 per cent a year over the last five years and continued growth is expected. Indeed, there are only a few providers of current account mortgages left**. These include NatWest and Clydesdale Bank.

Within the sector of offset mortgages and flexible mortgages UK lenders are becoming even more flexible. It used to be the rule that accounts linked to an offset mortgage had to be held in the same bank, but this is no longer the case. With many flexible mortgages UK lenders are allowing mortgage holders to maintain their existing current and savings account, simply paying into a purposely set up savings account.

It seems that the outlook for flexible mortgages is good. The sector is expected to be 50 per cent of all mortgages within the next five years. And now with flexible mortgages UK consumers have access to an even wider range of offerings, including flexible mortgages for self certification and buy to let borrowers.

However, please note that The Offset Mortgage Centre cannot arrange mortgages from First Direct.

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© 2007 and 2008 Offset Mortgage Centre | Terms and Conditions | Privacy Statement | We don't charge a fee for admistration of an offset mortgage. The Offset Mortgage Centre is the trading name of The Mortgage Broker Ltd, (a whole of market mortgage broker), which is an appointed representative of Home of Choice Limited, which is authorised and regulated by the Financial Services Authority | Your home may be repossessed if you do not keep up repayments on your mortgage. *Source - JPMorgan March 2007. **Source: Datamonitor - Uk Flexible Mortgages 2006 Report. In general Buy to Let mortgages are not regulated by the Financial Services Authority.