Flexible / offset mortgages

We know that it’s important to keep control over your income and outgoings and with your mortgage likely being one of your biggest debts, if you want a mortgage that offers some flexibility – an offset or flexible mortgage might be the right choice for you.

With an increasing number of flexibility and offset options now available for mortgages on the market, we can work with you to ensure we find the best option for your circumstances.

How does a flexible mortgage work?

Flexible mortgages work in the same way as a standard mortgage, however, there’s a number of additional options that you may be able to take advantage of to make it easier to manage your mortgage.  Typically, with a flexible mortgage you will be able to:

  • Make overpayments – ideal if you want to overpay a bit extra each month, or a lump sum, this, will in turn, reduce your interest charges and help you pay off the mortgage sooner.
  • Some lenders will also let you borrow back any money that is overpaid.
  • Make underpayments.
  • Take payment holidays if you are experiencing financial problems.

How does an offset mortgage work?

An offset mortgage links your current and savings account balances to your mortgage in order to reduce the mortgage balance, many homeowners use offset mortgages to either reduce their monthly payments or to reduce their mortgage term.

By linking your savings or current account to your mortgage, your savings balance will be deducted from your mortgage balance, and you will only pay mortgage interest on the remainder of the mortgage balance.  Your savings stored in your linked account can still be accessed at any point.

Example:  Your remaining mortgage balance is £150,000 and you have £25,000 in a current or savings account – by linking your account with your mortgage, you will only be charged mortgage interest on the remainder of the mortgage balance (£125,000).

Things to consider

As with any mortgage, there are a number of considerations to take into account before choosing to go forward:

  • Flexible mortgages often have higher standard interest rates than other mortgages.
  • Taking a holiday or making an underpayment will result in paying more overall – you should only take advantage of these features if you really need to.
  • Mortgage interest rates are generally higher than interest rates on savings accounts, therefore, offsetting your savings balance towards your mortgage can mean your money is working harder.
  • Savings balances linked with your offset mortgage will not earn any interest.

Making it easier to control your mortgage

If you are considering a flexible or offset mortgage our team of expert mortgage advisers can help.  From initial enquiry to moving day, we’ll be there to assist you and make recommendations based on your individual circumstances, and we’ll offer you mortgage options best suited to you.  Just give us a call on 0800 138356 or get in touch below.

Our advice to you is also backed by our unique unconditional service and 100% mortgage guarantees which means you can proceed with us in absolute confidence that you will get a guaranteed mortgage and the very best service! Read more about our guarantees.

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