The uk flexible mortgage - the benefit and risk of flexibility

The main feature of a uk flexible mortgage loan is the facility to make extra payments when you have extra money available. Extra payments can be lump sum or extra amounts per month. Often a uk flexible mortgage loan also offers the option of taking a payment holiday by building up a reserve of excess payments . These features can help in paying the mortgage off early or coping with unexpected expenses. A uk flexible mortgage is usually offered on a daily interest basis.

benefit

You can make excess payments to reduce the loan interest, pay off the loan early, or build up a reserve against which you can take a payment holiday during periods of unexpected expense.

A uk flexible mortgage usually provide a loan draw down facility that allows you to borrow extra funds at a set predetermined rate.

risk

The interest rate for a flexible mortgage is usually slightly less favourable than for other types of mortgage. This is the cost you pay for having the flexibility .

The ability to take a payment holiday requires a disciplined approach from the borrower in order not to get too over-extended.

Interest rates tend to be variable so if the base interest rate rises, so will your interest payments.

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