Flexible Rate Remortgage

If your current mortgage deal does not offer you the freedom to fit your mortgage payments around your current financial circumstances, a flexible remortgage may be exactly what you’re looking for. As an example, if your salary involves quarterly bonuses and you therefore have a lump sum from time to time that you would like to put towards your mortgage payments, a flexible mortgage deal would enable you to do this without incurring any penalties. Alternatively, if you temporarily need to suspend your mortgage payments (known as taking a ‘payment holiday’) due to financial commitments elsewhere, a flexible remortgage deal would make this much easier for you.

The options available if you take a flexible-rate mortgage are many and varied. Some deals will enable you to use your savings against your repayments (known as an ‘offset’ remortgage), whilst others will come with the option of additional borrowing at a favourable rate. As you can imagine, there are many ways in which a flexible remortgage can save you money – early repayment can save you thousands in interest, and a payment holiday would be a cost-effective alternative to taking out another loan, if you need to raise extra cash quickly. SimplyFinance has many tools available to help you find the best flexible deal to suit your circumstances.

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Flexible Rate Remortgage Facts

• You may benefit from falling interest rates. With a flexible rate remortgage, your interest rate will rise and fall with the Bank of England base rate of interest. If the base rate falls, your rate will also decrease, thereby saving you money.
• You may run into some financial uncertainty. If the base interest rate rises, your monthly payments will increase as well. There is always the potential danger with a flexible rate remortgage that the interest rate you're paying could increase dramatically, and this may lead to financial difficulty.  If you have been paying relatively low rates, you can combat this instability by putting any extra money into a dedicated savings account that you can fall back on if your payments increase beyond your means.
• Many lenders' flexible rates are not competitive. If you opt for a flexible rate remortgage, the interest rate you begin with may not necessarily be competitive with other lenders. The lure of a flexible rate is the possibility that your rate could decrease if the base rate decreases.