If you have been looking for a mortgage that gives you maximum financial freedom, then look no further than the Flexible Mortgage. In short, this type of mortgage allows overpayments, underpayments and the facility to take payment holidays without incurring penalties.

Flexible mortgages are particularly suited to anyone who can't be sure they'll always have enough cash when they need it, due to the nature of their work pattern. The flexible option also offers an efficient way to save, as interest on overpayments is calculated at the mortgage rate you are paying. Some lenders also offer all-in-one accounts that combine your current account with your mortgage.

Will a ( flexi ) flexible mortgage work for you?

You could save money with a flexible mortgage if, for example, you are in a position to overpay your monthly mortgage repayments from your income or if you anticipate getting a lump sum in the future, perhaps from dividends, an inheritance or other investments. A flexible mortgage can also give you more financial stability if your employment is based on short-term contracts or if you are self-employed and your income is irregular. This type of mortgage is suitable only if the borrower has a disciplined approach.

Types of ( flexi ) flexible mortgage

There are many different types of flexible mortgage - these can be categorised as follows:

Standard variable rate (SVR) mortgages Variable rates on flexible mortgages used to be prohibitively high, but many are now in line with non-flexible products and are even discounted.

Tracker mortgages Tracker mortgages generally track the Bank of England base rate.

Fixed-rate mortgages These have a fixed interest rate for a set period, after which the rate reverts to the SVR.

Capped-rate mortgages With this type of mortgage, you pay the SVR up to a predetermined limit. Above that, your borrowing rate does not rise for a set period.

Current account mortgages (CAMs) CAMs combine your home loan with your bank account. You pay interest at one rate, recalculated daily, on everything you borrow. All the money that comes into the account immediately reduces the total borrowing.

If you would like to discuss the mortgage options available to you or would like to consider ways of reducing your existing mortgage borrowings, please e-mail or contact us to arrange a meeting or use our online advice service.

Overpayments allowed without penalty - this means that you may overpay on a monthly basis or make lump sum payments to reduce the capital balance of your mortgage, and therefore pay your mortgage off quicker, saving you money in interest payments.

Daily interest calculation - this means that you gain advantage immediately on any reduction in capital, either by making a standard payment on a capital and interest mortgage or by making an overpayment(s). The day after you make a capital reduction, the interest due is calculated against the lower capital balance. You can therefore either reduce your monthly payment periodically but retain the same mortgage term (in years), or retain the same monthly payment but reduce the term over which you pay the mortgage. Both methods will save you money in interest - this may be significant over the full term of the mortgage.

Underpayments or payment holidays allowed - some flexible mortgages will allow you to make underpayments (pay less) or take a payment holiday (not pay your mortgage for a specified period of time). This is sometimes only allowable if you have previously made overpayments on the account, although some lenders will allow this anyway, providing the total capital balance remains below a certain loan to value. The benefit associated with this feature is that it allows a reduction in outgoings for certain 'expensive' months, such as Christmas or holiday months. It can also be a very useful feature for self employed applicants, particularly those that may have a seasonal fluctuation in their income.

Draw down facility - this is a feature whereby you may draw out money against your mortgage account, from the spare equity available in your property, with immediate effect. This is usually by way of a cheque book facility and up to a predefined Loan To Value limit. Any money borrowed against your property in this way, will be charged at the same interest rate as the rest of the mortgage balance. This feature may be useful for business purposes, allowing applicants to draw money out and pay it back in at will (within specified limits).

This is just an overview of some of the features associated with Flexible Mortgages . For further information, please submit an enquiry and your mortgage adviser will explain their recommendations to you in full.