Flexible mortgages what are they?
Flexible mortgages were touted by many as the best thing since sliced bread, and while they have many advantages they are not suitable for everyone.
One of the main advantages of a flexible mortgage is that you can alter your payments to suit your current financial position and lifestyle.
You can also make lump some payments, which will probably save you more on interest payments than you would make if you invested the same amount in a savings account. This is idea for borrows you may receive bonuses as part of their salary packages.
You can also pay off the mortgage quicker by increasing your payments, which will save you a lot in interest payments. These are the major benefits of the flexible mortgage.
All the above sound great so what is the catch?
When flexible mortgages arrived on the UK market they were seen as a valuable addition to the current deals available, but they also came with many additions including cheque books and credit card, and many offered payment holidays. While all this sounds great the flexible mortgage deal is usually offered at a variable rate of interest which means that if someone took out a flexible mortgage when the interest rate was at its lowest a year or two ago may now be facing higher monthly payments of around 30% higher, which adds considerably to costs when compared with fixed rate deals that are available.
Whatever type of mortgage you are after it can pay to take qualified mortgage advice from a company or broker who is not tied to one company or agency.
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