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Flexible Mortgages and some examples

In recent years a great deal has been spoken about this type of mortgage, following an in-depth analysis in the late 90's by the consumer television programme "Watchdog".

Our Australian Cousins have been enjoying the benefits of flexibility with their mortgages for many years now, and Mortgage Helpline Clients within the UK have now enjoyed access to flexible mortgages for over 7years.

Q. What exactly is a Flexible Mortgage, and why should I be interested?

A. This type of mortgage account usually offers the borrower a great deal of scope in being able to `customise` their repayments, to adjust them, to borrow-back overpayments made to their account, and even to be able to take 'repayment holidays' should the need ever arise. Some of the best products allow you to pay your mortgage for 10 months of the year, and then take a 'repayment rest' for the remaining 2 months.
How useful for say, holidays or Christmas!

Let`s look at a simple illustration.

Example: Capital Repayment Mortgage of £ 75,000 over 25 years

Scenario: Borrower decides to `overpay` his mortgage on a regular basis.

Result: Mortgage becomes repaid 5 years and 2 months earlier than scheduled.

Borrower saves over £ 24,000 in mortgage interest.

As we can see from the above example, the red curve shows the effect of this so-simple repayment adjustment and the results can be most impressive.
A slightly more complex example follows on the next page. >> Next page >>

Please remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it