'Flexible mortgage' is a term that's used a lot, but what exactly does it mean? A flexible mortgage allows
borrower to make extra repayments when they have extra money and even reduce or skip payments should need arise. A flexible mortgage allows you to make extra payments to reduce amount outstanding on your mortgage thereby reducing interest you're paying or pay off your mortgage earlier than planned.
Imagine being able to save money in mortgage interest, or borrowing enough money pay off your credit cards or personal loans, or buy a new car at a low rate of interest. That's exactly what flexible mortgages enable you to do.
Flexible mortgages allow you to save money by cutting length of your mortgage term. You can also buy yourself more time when money is tight by reducing your monthly repayments or increase you mortgage if you need to borrow money.
'Flexible mortgages', also known as 'Australian mortgages' are fast becoming most popular way of taking out a new mortgage.
Flexible mortgages are designed for people who want option to vary their mortgage payments to match changes in their cash flow. To varying degrees, they let you underpay, overpay, take payment holidays, pay off lump sums and borrow back overpayments.
Flexible mortgages come in various guises but they mainly allow you to make extra lump sum payments, borrow back money, allow you to take repayment holidays and also allow you to make underpayments. Some flexible mortgages will double up as a current account, where your salary is paid in monthly and so you are in effect paying off a huge overdraft.
Unlike some traditional loans that still charge mortgage interest on an annual basis, fully flexible mortgages calculate interest daily, which means that any overpayments you make are immediately credited against your loan, thus reducing your interest costs. This gives you flexibility to manage your mortgage payments to suit your cash flow needs as your circumstances change.
