Flexible Remortgages - Why They Are So Important In 2008

For the last few years you have been probably happily paying a very low rate of interest on your mortgage. Some deals at the peak of 2006 and 2007 were below 4%. You also probably had minimal fees and a lot of leeway - but things are very different now. The credit crunch has meant that lenders cannot afford to offer mortgages as low as they once could. They are also tightening approvals and limiting the amount of credit they are lending out. But they are still remortgaging many homeowners who just need to get by and wait for the economic storm to pass. That's why there are now more flexible remortgages - deals that are flexible with fees, with payments and with penalties. Lenders know things are going to be tough for a while, that's why they are offering flexible remortgages.

Flexible remortgages are not going to be cheaper than any other mortgages. In 2008 there isn't necessarily such thing as a cheap mortgage - but they are easier to handle. Flexible remortgages allow borrowers to underpay, in other words they allow you to pay less on a given month. They do not allow this every month, and it only comes after careful consultation with your mortgage lender - but it does give you time to adjust.

Flexible mortgages also offer complete payment holidays, so you can go entire months without paying your mortgage at all. Of course this can be very risky, as it will make your mortgage more expensive in the long run and it could affect your credit score - but it could be the lifesaver you need. No one looking to take on flexible remortgages should be planning a payment holiday, but it is there if you really need it.

Finally, flexible remortgages can be used to overpay, as well as underpay. Many mortgages do not allow you to pay off your mortgage faster, for that would obviously mean the mortgage lender loses out. But with flexible remortgages, you can do as you please. If you have a windfall or just want to use up some savings you can pay off as much as you like.

Flexible remortgages are crucial for many homeowners in 2008 because it is the year of the rate shock - and the only way to get over a shock is with care and patience. And flexible remortgages can offer that respite, making sure you keep paying your mortgage into 2009 and beyond.

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© 2007 and 2008 Offset Mortgage Centre | Terms and Conditions | Privacy Statement | We don't normally 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 Ltd. Home of Choice Ltd 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 Barclays Bank: Calculation based on an offset tracker product; repayment mortgage of £100,000 over a 25-year term that has been offset with £20,000 savings, resulting in a reduction in mortgage term of 8 years and 8 months or a saving of £44,867 in overall interest. Calculation assumes balance remains constant throughout the life of the mortgage and that the mortgage loan and savings balance will vary. Outcomes will be either a reduction in payments or a reduction in mortgage term. No interest is paid on balances offset against the mortgage. Typical rate is 6.45% (variable). The overall cost for comparison is 6.7% APR.