A flexible mortgage is a secured loan, which can be paid back in differing amounts while providing access to the housing equity (within pre-agreed limits).
There are five key features with a flexible mortgage: the ability to pay the mortgage off early through overpayments or lump sum payments, the ability to borrow money back by withdrawing lump sums, making underpayments, and having payment holidays. A flexible mortgage gives you more control than with a traditional type of mortgage, and the overpayment feature can significantly save money on your mortgage, for example:
Example 1: 140,000 mortgage, interest rate 6%, mortgage term 25 years.
Monthly mortgage payment was 902 and increased by 50 to 952 the overall cost saved would be 16,193 and the adjusted mortgage term would be 22.2 years.
Example 2: 100,000 mortgage, interest rate 7%, mortgage term 30 years.
Monthly mortgage payment was 665 and increased by 50 to 715 the overall cost saved would be 31,193 and the adjusted mortgage term would be 24.2 years
Lump sum payments can also make a significant difference to your mortgage. For example, 150,000 mortgage, interest rate 7%,...
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