A flexible mortgage is designed to let you to make extra repayments when you have extra money, and to reduce or even skip payments when necessary. 

The main benefit of flexible mortgages is that many schemes are offered on a Daily or Monthly Interest Calculation basis. Until the arrival of flexible mortgages most, if not all, UK lenders were charging interest on an annual basis which meant that borrowers making over payments were not getting the benefit straight away because it could be a year before the capital was reduced by the over-payment. 

Whereas, on a flexible mortgage where the interest is being calculated on a daily basis, any over payment reduces the mortgage balance immediately hence the borrower will be charged less interest from the next day.  Over-paying the mortgage on a monthly or regular basis, even by a relatively small amount, will reduce your mortgage term by years (hence saving payments).

Many flexible mortgages come without any Early Redemption Charge so the borrower is not ‘locked-in’ to any particular lender. In addition the interest rate charged is often lower than the usual Standard Variable Rates charged by the other more ‘traditional’ mortgage lenders.

Possible flexible mortgage features include:

Offset - this allows you to offset any savings that you also have against the value of your mortgage, and therefore pay less interest, or pay off your mortgage earlier. 

Over or under payments - a flexible mortgage could allow you to take payment holidays, perhaps when you are experiencing financial stress, or overpay when you have extra money. This is ideal for people who have fluctuating incomes or who want to clear their mortgage early. 

Repay lump sums without penalty - often a flexible mortgage will allow you to repay capital amounts up to a specified limit and without penalty. 

Further advances - many flexible mortgages allow you to withdraw further funds up to a limit. 

An increasing number of fixed, capped and discounted deals have more flexible features as well. 

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