Flexible Mortgage
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What is a flexible mortgage? A Flexible Mortgage is just what the name implies, a mortgage that offers the borrower flexibility in how they make their mortgage repayments. With a flexible mortgage, the lender can make extra payments or in some cases skip payments. The flexible mortgage is ideal for people who have larger incomes at intervals throughout the year through commission or bonuses for example, enabling them to pay down the principal quicker than a regular mortgage.
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| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Fixed (no tie-in beyond benefit period) | ||||||
| First Direct Offset | 5.49% | 2 years | 6% | 80% | No Overhang |  |
| Alliance & Leicester Prime | 6.14% | To Aug 2010 | 7.19% | 75% | No Overhang | |
| Derbyshire BS (Direct) | 6.79% | To Sep 2018 | 7.09% | 90% | No Overhang | |
| Fixed (with tie-in beyond the benefit period) | ||||||
| Market Harborough BS (Direct) | 3.99% | 2 years | 7.15% | 75% | Overhang | |
| Capped | ||||||
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Light Adverse Payment History | ||||||
| Skipton BS | 6.19% | To Aug 2018 | 6.45% | 75% | No Overhang | |
| Ipswich BS | 6.49% | To Aug 2011 | 7.24% | 80% | No Overhang | |
| Medium Adverse Payment History | ||||||
| Heavy Adverse Payment History | ||||||
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Discount (with tie-in beyond the benefit period) | ||||||
| Discount (no tie-in beyond benefit period) | ||||||
| HSBC Bank plc (Direct) Purchase | 5.43% | 2 years | 6.25% | 90% | No Overhang | |
| Mansfield BS (Direct) | 5.65% | 3 years | 7.19% | 75% | No Overhang | |
| Barnsley BS (Direct) Branch only | 5.69% | 2 years | 7.19% | 85% | No Overhang | |
| Market Harborough BS (Direct) | 5.95% | Term | 7.15% | 75% | No Redemption | |
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| HSBC Bank plc (Direct) Purchase | 5.43% | 2 years | 6.25% | 90% | No Overhang | |
| First Direct Offset | 5.49% | 2 years | 6% | 80% | No Overhang | |
| Alliance & Leicester Prime | 5.89% | 2 years | 7.19% | 75% | No Redemption | |
| Market Harborough BS (Direct) | 5.95% | Term | 7.15% | 75% | No Redemption | |
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Direct Line | 6.39% | To Jun 2010 | 6.5% | 95% | No Overhang | |
| Bank of Ireland 1st Start | 6.99% | To Jul 2013 | 7.09% | 95% | No Overhang | |
| Bristol & West Mortgages First Start | 7.19% | To Jul 2013 | 7.09% | 95% | No Overhang | |
| Coventry BS | 7.39% | To Sep 2013 | 7.09% | 95% | No Overhang | |
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Barnsley BS (Direct) BTL | 6.19% | 3 years | 7.19% | 75% | No Overhang | |
| Principality BS Buy to Let | 6.39% | To Jun 2010 | 7.09% | 60% | No Redemption | |
| Lloyds TSB BTL (Direct) | 6.54% | To Aug 2011 | 7% | 80% | No Overhang | |
| National Counties BS Investment | 6.79% | To Aug 2013 | 7.35% | 75% | No Overhang | |
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Market Harborough BS (Direct) | 6.1% | Term | 7.15% | 75% | No Redemption | |
| Scottish Widows Bank Offset | 6.29% | 2 years | 6.49% | 75% | No Overhang | |
| Yorkshire BS (Direct) | 6.54% | To Jun 2013 | 6.9% | 75% | No Overhang | |
| Lender | Rate | Duration | Standard Rate | Max LTV | Tie in | Proceed |
|---|---|---|---|---|---|---|
| Mansfield BS (Direct) | 5.9% | 2 years | 7.19% | 75% | No Overhang | |
| Principality BS Direct | 5.99% | To Jun 2010 | 7.09% | 75% | No Overhang | |
| HSBC Bank plc (Direct) Fee Free | 5.99% | Term | 6.25% | 90% | No Redemption | |
People who can benefit from a flexible mortgage:
- Self-employed
- People who relocate unexpectedly, or
- Seasonal employees who experience periods of extremely high or low income.
Flexible mortgage benefits
Lump sum payments – A flexible mortgage allows the borrower to make one-off payments of any amount and at any time throughout the year without the consequence of penalties. Lump sum payments have the potential to pay off the mortgage faster than a regular mortgage plan.
Repayment holiday – A flexible mortgage can offer a repayment break for those who have made additional payments to their mortgage. Whilst repayment breaks are convenient, they should be avoided if the purpose of having a flexible mortgage is to repay capital borrowed ahead of time.
Interest calculated daily – Many mortgages have interest calculated annually, however, flexible mortgages make interest calculations on a daily basis. Having interest calculated daily makes for lower mortgage payments – especially as a result of a lump-sum payment.
Underpay – If you do not want to take a break completely, a flexible mortgage should allow you to pay less than your regular payment if you have previously made an overpayment.
Borrow – By making a lump sum payment, a flexible mortgage allows you to borrow money and pay it back at a later date. This characteristic of a flexible loan enables you to put extra money on your mortgage to save interest when you have extra cash and get access to extra funds when needs arise.
Flexible mortgage disadvantages
Due to the relative freedom enjoyed with this kind of mortgage, flexible mortgages often have higher average interest rates than some of their counterparts. This can be countered through the use of other schemes in combination with flexible mortgages, such as combining flexible mortgages with discount rates.
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Advice
Let us help you shop around for the best flexible mortgage deal. Check out our best buy table, which allows you to compare deals on flexible mortgages. We have also compiled a comprehensive list of the main flexible mortgage providers; visit our A-Z directory page for their details. Or maybe you would like to visit our Forum to see what other people have to say about mortgage providers and post your own message.
Finally, if you have had dealings with any provider on our A-Z directory, don’t leave without giving them a rating, we would appreciate your assessment.
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