The best flexible mortgage in the UK is the one that fits the borrower's needs. Flexible mortgages are home loans that can be paid back in different ways than originally planned. They can have underpayments, overpayments, repayment breaks, and interest charged often. This article will look at each part of a flexible mortgage and explain what makes the best flexible mortgage UK deal.
Overpayments
Most people with flexible mortgages pay more than they need to on their loans. If you make extra payments early in your mortgage term, your loan will be paid off faster. Even a small increase in your monthly payments will help you pay off your mortgage loan faster. For example, if you had a GBP70,000 mortgage with a 6.2 percent interest rate and gave up your weekly GBP2.80 large latte, you could pay off your mortgage 1 year and 5 months early.
Some flexible mortgage lenders say that the minimum overpayment is GBP25 per month and that the maximum overpayment is 10% of the remaining balance when the loan is paid off.
Overpayments can also be made with a one-time lump sum payment.
The best flexible mortgage in the UK is one that doesn't charge you extra if you pay more than you owe.
Underpayments
When you make some overpayments, you can end up with some underpayments. The option to pay less on a flexible mortgage is helpful if, for example, your money is tight. Then, you can choose to pay less for a few months until your money is in order.
The best flexible mortgage deal in the UK lets you make payments early.
Payment Break
Some flexible mortgage plans let you stop paying your mortgage completely for up to a year. This could be helpful if you want to start a family or take a break from work. You must have made enough extra payments to cover the time you don't pay, and some mortgage lenders may only let you take a couple of months off each year.
The best flexible mortgage deal in the UK lets you skip payments for up to a year at a time.
Getting Money Back
If you need extra cash for any reason, it makes sense to borrow back overpayments instead of taking out a loan. Most of the time, you have to build up a reserve of overpayments that you can use to get a loan. The total amount you can borrow through your original mortgage may have a cap. The great thing about mortgage overpayments is that you don't have to put any extra cash into a savings account and earn a small rate of interest. Instead, the amount you overpay is taken off your mortgage, so it's like your savings are earning the mortgage rate.
Some flexible mortgage lenders let you withdraw overpayments directly with a chequebook or debit card, while others let you borrow money as the value of your home goes up.
The best flexible mortgage deal in the UK makes it easy to get money.
Costs of interest
Flexible mortgages are different from some traditional mortgages that still calculate interest on an annual basis. Instead, interest on flexible mortgages is calculated every month or every day. This means that any extra payments you make are applied right away to your loan. This means that you pay interest on a smaller amount of debt right away, which saves you money on interest fees.
The best flexible mortgage deal in the UK works out interest every day.
Conclusion
The modern mortgage market has become more flexible and open to new ideas. As a result, borrowers now have a wider range of flexible mortgage packages to choose from. Because there are so many different types of flexible mortgages, an independent mortgage broker can help you find the best flexible mortgage UK deal for your needs.
