Flexible Repayment Mortgages
Some mortgages allow you to vary payments for periods of time with flexible repayment mortgages. You could also make overpayments to help pay your mortgage off early. You may have the facility to take payment holidays or borrow money back to help you get through an expensive period.
Offset Mortgages
Some schemes allow you to ‘offset’ savings against the mortgage to reduce the amount of interest payable, others incorporate current accounts, savings accounts, and credit cards.
Some of these schemes can be very complicated and it can be hard to keep track of the overall payment schedule. You should think carefully whether an offset repayment mortgage is suitable for you before taking one out. It is often possible to get a cheaper pay rate by taking an alternative type of scheme.
Cashback Mortgages
Occasionally lenders offer smaller cashback schemes in combination with other rates i.e. discounts or fixed rate schemes. These smaller cashbacks are often a welcomed bonus to another scheme. This is known as cashback on mortgage payments, feel free contact us for more information.
Mortgage Early Repayment Charges
Most schemes will have early repayment charges attached to them which mean if you do not keep the mortgage under the agreed scheme, for a specified period, then a penalty or ‘early repayment charge’ would become payable.
These charges are often expressed as a percentage of the loan being repaid and as such can run into thousands of pounds.
This is one aspect we will cover with you when shopping around for a suitable scheme.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.
Frequently Asked Questions
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What is a flexible offset mortgage?
A flexible offset mortgage enables you to reduce the amount of monthly interest by using your savings. For example, if you have £10,000 in savings and a mortgage of £150,000, you would only pay interest on £140,000.
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What does ERC mean on a mortgage?
ERC on a mortgage stands for early repayment charge. This is a fee that lenders charge if you pay off a mortgage or make large overpayments before a set date. This is often around 1%-5% of the balance and it covers the lender’s lost interest.
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Is offset mortgage a good idea?
Offset mortgages are definitely beneficial for specific borrowers, especially higher-rate taxpayers with large savings, as they enable you to offset your savings against your mortgage balance, reducing interest payments and allowing you to pay the loan off faster without paying tax on saved interest. While they do offer flexibility, they often come with higher interest rates.
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What does cash back mean on a mortgage?
Cashback is a lump sum of money paid by a lender to a borrower when the mortgage is completed, it is often used as an incentive to attract new customers. This cash, which can be a fixed amount or a percentage of the loan, is designed to help with the upfront costs such as furniture or legal fees, however often comes with higher interest rates.
Our Testimonials
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