When looking to secure a mortgage, many borrowers focus on interest rates and monthly repayments. However, many mortgages come with several lesser-known features that offer additional flexibility. Understanding these options can help you manage your mortgage more effectively, and potentially allow you to save money in the long run.
Some of these features include:
Overpayments: Reducing your mortgage term and interest charges
Many mortgages will allow you to make overpayments, either as regular amounts or as a lump sum, which can help you to reduce the overall term of your mortgage and lower the amount of interest that you pay.
The amount that you can overpay without incurring charges will vary from lender to lender, with many permitting up to 10% overpayment before early repayment charges are enforced.
If you are in a position whereby you have left over salary at the end of each month, you receive a one-time lump payment, such as a work bonus or inheritance payment, making use of overpayments may help you become mortgage-free quicker.
Mortgage porting: Move home without penalty
If you’re considering moving home but are currently locked into a fixed-term mortgage deal, porting your mortgage may be an option. Mortgage porting allows you to move your existing mortgage to a new property, potentially avoiding early repayment charges and maintaining favourable interest rates.
It should be noted, however, that while most mortgages are portable, not all are, and the ability to port your mortgage is subject to affordability checks.
Payment holidays: A temporary break from repayments
Some lenders may offer payment holidays, which allow you to take a short-term break from your mortgage payments. This feature can be helpful in times of financial difficulties, such as a redundancy or large unexpected expenses.
It is important to note, however, that interest continues to accrue during your payment holiday, and thus the overall debt you owe will increase. It is essential that you check your lender’s terms, or speak to a Cooper Associates Mortgages adviser, as eligibility requirements vary.
It is also important to note that, while payment holidays will not directly impact your credit score, it may be questioned and looked upon unfavourably by lenders in future.
Get in touch today to unlock your mortgage
Mortgages are more than just a loan for buying a home; they often come with additional features that can make a big difference in how you manage your finances.
Understanding these flexible options could save you money, provide peace of mind, and help you adapt to life’s changes.
Before committing to a mortgage, it’s always worth discussing these features with your lender or a mortgage adviser to ensure you get the best deal for your circumstances. Get in touch with our team of expert mortgage advisers today to discover how you can make your mortgage works best for you.
