Mortgage Features – Help for Buyers

Repaying your mortgage

Once you have a mortgage in place, you’ll be making regular monthly repayments until the end of the mortgage term, or until you decide to move or take out a new loan.

However, lenders do offer a certain amount of flexibility when it comes to the amount you pay each month; your adviser will be able to explain the options available to you.

Making larger or smaller repayments

If you’re looking to repay your loan faster, you may be able to increase your monthly payments. Some lenders impose a limit, and there may be an early repayment charge attached to your mortgage.

Depending on your circumstances, some lenders may be prepared to let you make smaller monthly payments. You should be aware that this will increase the amount outstanding and the time it will take to repay the loan in full.

Repayment ‘holidays’

Some lenders are prepared to allow borrowers to take a temporary break or ‘holiday’ from making repayments, sometimes for up to a year. However, you may need to
have overpaid your mortgage for a period of time in order to qualify.

If you are temporarily struggling to meet your repayments, because you’ve been made redundant or are going on maternity leave, you may be able to negotiate a break for a few months until you are in a position to resume making repayments.

Lenders vary in their policy towards borrowers wishing to suspend their payments. Your advisor will be able to tell you more about the criteria operated by individual lenders.

Offset mortgages

An offset mortgage links your savings and in some cases your current account to your mortgage. This means that instead of earning interest on your savings, you pay less interest on your mortgage. So, for example, if you have a mortgage of £125,000 and you have £25,000 in your linked accounts, then your monthly interest would be calculated on £100,000 instead of the balance of £125,000.

Portable mortgages

A portable mortgage is one that can be transferred from one property to another while avoiding the early repayment penalties that would typically be incurred on the property sale.

Porting means repaying your existing mortgage when you sell your current property, and using the same mortgage to purchase your new one. This will be on the same terms as your existing mortgage, including the end date of any deal period.

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