What Are Flexible Repayment Mortgages?

It might seem bad business, but lenders prefer flexible repayment mortgages. Mortgages of the past were stiff - you had a rate, you paid that every month, nothing more. If you missed a payment you were penalised and if you worked hard you could pay off a little more. But lenders found that if they offered the borrower more - payment holidays, bonuses for overpaying and varying rates - then the borrower is more inclined to pay the mortgage. Flexible repayment mortgages have been created because lenders understood that a mortgage is a life decision and a long-term decision needs to be flexible in the 21st century.

Flexible repayment mortgages are designed to give more control over your finances with varying degrees of flexibility - it's all about give and take. With one of these deals you are be able to overpay if you can afford it or underpay and take payment holidays when you cannot. Of course flexibility is based upon your credit rating - the more you can be trusted as a borrower, the more freedom a lender is going to give you. But if you pay your dues, save hard and remain sensible with your money then you can reap the rewards with flexible repayment mortgages.

Flexible repayment mortgages have been specially designed to accommodate the changes taking place in the UK's working environment and lifestyles. This is particularly important right now as a recession looms. So with flexible repayment mortgages you are not only allowed to overpay or underpay for anything up to six months, but you are also able to take money out of your equity, like a secured loan. This is particularly useful for couples starting a family, or people taking time out to study. Flexible repayment mortgages really are flexible because the lenders of these deals understand that being too rigid with people will just lead to unhappiness, defaults and debt. And believe it or not, lenders want you to be as financially healthy as possible - it's good for their business too.

So if you cannot predict the future and do not know what is coming on the horizon, choose flexible repayment mortgages. They really are flexible and they really do work for borrowers who work hard for their money. Flexible repayment mortgages - the choice for the 21st century homeowner.

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© 2007 - 2010 Offset Mortgage Centre | Terms and Conditions | Privacy Statement | 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.