One of the many possible rewards for keeping a good credit record and financial status is the entitlement to more flexible mortgages. These involve certain levels of flexibility and freedom to the mortgage applicant with regard to the repayment terms and interest rates. Of course, the entitlement to flexible mortgages that offer these benefits to the borrower will be highly subject to the applicant’s credit history; the better your credit history and credit rating, the more flexibility will be offered with your mortgage by the lender.

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There are many potential advantages to obtaining a flexible mortgage; you may be entitled to lower interest rates, or costs such as early redemption charges may not apply. The main advantage of a flexible mortgage however is that interest rates are evaluated on a short term basis. Where standard mortgages often feature interest rates that are recalculated annually, the interest rate in a flexible mortgage is recalculated monthly or daily, meaning that any overpayment that is made will have immediate effect in reducing the mortgage balance. With a standard mortgage, the benefit of making overpayments may not be seen until as much as a year afterwards.

A further benefit of flexible mortgages may also be linked to the borrower’s current bank account; the interest payable on the outstanding mortgage balance is dependent on the current financial account of the borrower e.g. if the borrower has a mortgage balance of £60,000, and a current account balance of £3000, he or she will only owe interest on a mortgage balance of £57,000.