Flexible mortgages have grown in popularity over recent years. There are various types available but the main features are the ability to make lump-sum or increased monthly payments, borrow money back at a predetermined rate, take payment ‘holidays’ or decrease the monthly repayment figure.
Sometimes the mortgage effectively operates as a current account whereby you are paying off a huge overdraft. Flexible mortgages have higher rates of interest than standard mortgages but they charge interest on a daily basis so you are not paying interest on money already paid. Also, the rates are favourable when compared to those of secured personal loans.
You can usually underpay to the value of the overpayments you have made at any time and some deals will offer you the option of taking around two months’ payment holiday within a year after the first six months of your mortgage.