Mortgage features available on some mortgage products
Some mortgages have different features to others, where often the rate is compromised slightly to offer a mortgage that is far more customisable over time. At Money Workout our professional advisers are able to answer any questions you may have about the mortgages with special features available to you. Below we have listed some of the different motgage features available on some mortgages today.
Overpayments
Some mortgages allow a degree of overpaying within the mortgage. By paying more than your standard mortgage payment you can pay the debt off quicker and therefore pay less interest. This can be as either a one-off lump sum or a larger monthly payment. This is of extra benefit if the mortgage calculates interest daily or monthly, and can help if for instance you receive a substantial windfall or bonus and want to use that to reduce your debt and therefore the interest you pay back.
Underpayments
This is the flexibility for you to pay a lower monthly payment for a limited period of time e.g. 6 months. Increased interest will build up on the remaining mortgage during that time, meaning you either make increased payments later or extend the length of the mortgage. This can be helpful if you were to lose your job, have a child or become a carer for a relative etc.
Payment holidays
Like underpayments, payment holidays allows you to stop paying repayments altogether for a limited period. It is again the flexibility that may prove helpful if something changes in your life which means you temporarily can’t or don’t want to pay your mortgage for a period of time. Again this will mean you pay more interest as you have more mortgage remaining, and will either have to increase repayments or extend the term of the mortgage to make up the gap.
Borrowing Extra ("Loan Drawdown")
This feature gives you the flexibility to borrow further funds without lender approval, provided it is within an agreed limit. Traditionally you would need to agree a top up loan which may take time and incur potential cost. This allows extra borrowing at the same rate as your mortgage, which may also be at a rate lower than a personal or secured loan.
