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There are a number of limitations to
the standard types of mortgages available if your income
is erratic, for example if you are self employed or
perhaps working on short term contracts. Flexible mortgage
rates overcome this problem by allowing the borrower
to make both over and underpayments into the account.
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Indeed with enough credit you can take
a payment holiday. Usually this type of flexible mortgage
will also calculate interest daily meaning that you
will see an immediate impact of any overpayments that
you make.
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A number of these flexible mortgages
may also offer the ability to operate your mortgage
account as a bank account with the option to make withdrawals
in certain circumstances.
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Monthly payments can adapt to the level
of monthly income you receive. Interest is far more
likely to be calculated on a daily basis.
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Payment holidays are permitted. In
the longer term, with flexible mortgage rates, you
should see the reduction of the amount owing occurring
more quickly than a standard mortgage.
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Generally you will be unable to obtain
fixed, discounted, capped or cashback rates on flexible
mortgages. The lack of discipline in the monthly payment
means the temptation is there to spend the money on
other matters.
The flexible mortgage option is suitable in a number
of circumstances the most common being those identified
below.
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Self employed or contract workers.
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Individuals looking to repay their
mortgages quicker than their basic income would indicate
as, possibly the result of expected bonus payments
and or share options.
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Borrowers with larger loans
