A flexi mortgage normally has no penalties for early repayment of the loan.
Interest is usually calculated daily (sometimes monthly) and most importantly allows the borrower to make overpayments, which may help repay the loan early.
You are usually able to make underpayments as long as you have held the mortgage for a given period of time, usually a year.
A Flexi mortgage is ideal where someone receives irregular income and wishes to over pay during the mortgage term or plans to pay the loan off early with additional lump sum payments throughout the Mortgage term.
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A fixed rate mortgage offers a know level of repayment for the selected 'fixed rate' period i.e. 2 years. This allows you to know exactly what your repayments will be throughout the 'fixed rate' period.
Fixed rate products usually have some kind of penalty if you wish to repay your mortgage within the fixed rate period, this penalty is know as the Early Repayment Charge and typically might be between 3% - 5% of the Mortgage amount. Some Lenders charge an extended penalty charge which runs past the Fixed rate period.
After the 'fixed rate' period, the interest rate will usually revert to the lender's 'Standard Variable Rate' (SVR). Some lenders change an additional rate over their SVR.
Fixed rates are ideal for individuals who need to know what their mortgage repayments will be over a given period.
A 'discounted rate' is where a lender gives a discounted interest rate for a given period of time, usually 2 to 5 years.
The discounted is usually taken off the lenders Standard Variable Rate (SVR). This means that if the lenders SVR increase, whilst the discount remains the same, the actual interest rate payable will increase. Likewise, if the lenders SVR reduces, the interest rate payable during the discount period will reduce as well.
Most products usually have some kind of penalty if you wish to repay your mortgage within the fixed rate period, this penalty is know as the Early Repayment Charge and typically might be between 3% - 5% of the Mortgage amount. Some Lenders charge an extended penalty charge which runs past the Fixed rate period.
Discounted mortgages usually revert to the lenders Standard Variable Rate of Interest(SVR).
Discounted schemes may be suitable for individuals who wish to keep their mortgage payments down for a set period of time (the discount period) but still keep their mortgage linked to interest rates current at the time.
Possibly suitable for individuals whose income is likely to rise over the coming years.
A Tracker Mortgage is simply a mortgage that tracks the Bank of England base rate, although some schemes track an alternative interest rate know as the London Interbank Offer Rate (LIBOR).
One advantage of a Tracker Mortgage is that if you believe interest rates are likely to fall, your chosen loan will 'track' the fall in base rates.
If you are wrong the interest rate payable on your mortgage will of course rise.
Tracker mortgages are often also a flexi mortgage where you may have no penalties for early repayment of your mortgage. However lenders are increasingly offering 'discounted' tracker mortgages, and these discounted trackers nearly always have penalties for early repayment of your mortgage, during the discounted period and sometimes beyond.
These penalties are usually called Early Repayment Charges (ERC)
All lenders have a 'Standard Variable Mortgage' which is the interest rate they normally charge for their mortgages. This interest rate is usually at a level above Bank Base Rate which they feel is appropriate.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE