Flexible Mortgages

Overpay, Underpay, and Take Payment Holidays

A flexible mortgage allows the borrower to overpay, underpay and take payment holidays.

Overpayments - paying more than is required by increasing monthly payments and/or paying a lump sum to reduce the amount outstanding. The effect will be to repay the mortgage earlier than planned potentially saving thousands of pounds in interest. In some cases overpayments go into a separate pot and the borrower has access to this pot in future if required.

Underpayments - paying less than is required by reducing the amount of the monthly payment. This can be particularly useful during periods of increased expenditure – Christmas, holiday periods etc. Dependent on the lender overpayments may be required before underpayments are permitted, and there may be a limit on the amount and/or frequency of underpayments.

Payment holidays - taking a short term break from making any mortgage payments, normally for just a month or so. Again overpayments will probably be required first, otherwise there is the danger that a borrower will no longer be on track to repay the mortgage by the intended date.

Interest Calculations - check that lenders calculate interest daily. If the interest is calculated annually there could be little or no benefit of making overpayments.

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Your home may be repossessed if you do not keep up repayments on your mortgage. Memigo Money provides information but does not sell or provide advice on mortgages or their suitability. There may be a fee for mortgage advice; the precise amount depends on your circumstances.

For adverse credit mortgages the overall cost for comparison will vary, the actual rate available will depend upon your circumstances. Ask for a personalised illustration.

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