In today’s mortgage market, many home buyers are looking for a cheap flexible mortgage to make the task of meeting their mortgage payments and managing their money easier. There are many varieties of cheap flexible mortgage. They can be offset mortgages, current account mortgages or standard mortgages with flexible features. A cheap flexible mortgage can have a long term fixed rate period, a short term fixed rate period or a variable or discounted variable rate. Whichever type of cheap flexible mortgage couples have, there are ways in which they can make the most of the flexible features to save themselves money.
Take a current account mortgage, for example. A cheap flexible mortgage of this type allows people to put combine their mortgage account with their current account and even to consolidate Darwin home loans and other debt. The offset principle is that interest would be paid on only the actual debt, with any credit balances reducing the interest due. A couple could get more out of this cheap flexible mortgage by paying both their salaries into the account. This means that they could get double the benefit of offsetting by having an even smaller mortgage balance to pay interest on.
Offsetting will also work with offset mortgages, but there are other ways in which couples can make the most of a cheap flexible mortgage of this type. Some offset mortgages allow borrowers to offset only one savings account, which is linked to the mortgage account but remains separate. However, where these cheap flexible mortgages allow more than one account to be linked, couples can link both their savings accounts and offset even more. There are even deals which allow several current accounts and up to 12 savings pots to be linked, maximising the benefits of offsetting.
When searching for a cheap flexible mortgage, some of the features that people really want are the ability to overpay and underpay. Most of the cheap flexible mortgages allow overpayment, so if both people in a couple have lump sums available they can use this feature to the limit. People who earn commission or bonuses will be able to overpay on their cheap flexible mortgage, usually to the tune of 5 or 10 per cent a year.
Underpaying On A Flexible Mortgage
Underpayment is another option a cheap flexible mortgage may have. Young couples who are starting a family might find this a very useful feature. Underpayment means that you make less than the stated mortgage payment for a period. This is usually limited to somewhere between three and six months, though it can be much less. Similar to this is the payment holiday, which means not making any payments for a given period. If someone’s on maternity or paternity leave, this can be a very useful feature of a cheap flexible mortgage. Remember that interest will be added, so don’t underpay for too long. Remember underpayments and payment holidays could increase the mortgage term and/or the total amount payable.
The key to making the most of a cheap flexible mortgage is sound financial planning Melbourne. With a little know-how couples can offset as much as possible on a cheap flexible mortgage and maybe pay it off several years early.