Flexible Repayment Options

A standard repayment mortgage is the standard option and the simplest to work out. You pay the capital back in equal monthly amounts, and pay interest on the capital still owed. The interest payment therefore reduces monthly, while the capital paid increases.

However, you have some flexible options, including:

• Deferred Start
• Increased Regular Payments
• Payment Holidays
• Irregular Lump Sums

If you want to apply any of these options you must make sure you have a written agreement from your mortgage lender, or you could be accused of missing payments and that could in turn affect your credit rating.

Deferred Start

With a deferred start repayment mortgage you can delay the date at which you start your repayments. Interest is still charged, but not payable immediately, and the amount of the mortgage is increased by that amount. It's a very useful and popular option for first time buyers that have to find money to pay the legal fees, furnish and decorate their home, or even pay for a honeymoon.

Increased Regular Payments

Some lenders will allow you to increase your regular payments to a variable rate mortgage, and also pay occasional lump sums. You can then pay off your mortgage quicker, and hence pay less interest.

Payment Holidays: Monthly Payment Breaks

Often referred to as payment breaks, lenders will allow you to spread your payments over fewer months, e.g. 10 monthly instead of 12 monthly payments. There are other options, but the 'holiday' doesn't mean you pay less, just that you pay more over fewer months. You might need some extra money when you have a new baby, for example, and will find it easier to take two months holiday or deferred, and spread these over the next 10 months. If you are paying 400 a month, you will then miss two months and then pay roughly 480 for each the next 10 months, perhaps with an interest payment adjustment.