# Best Flexible Mortgage?



## mike_bailey (May 7, 2002)

I've a OneAccount mortgage at the moment but I'm thinking of changing because the mortgage rate is 4.95% and there seems to be plenty of better rates out there.

It has to be flexible because me earnings is erratic, anybody got good advice on where I might turn up a good deal?


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## David_A (May 7, 2002)

Charcol normally have some good deals, they also seem to sort out some good deals with building socs specifically for Charcol. They're worth a chat - and don't forget the advice is 'free' they only charge you when you take out a product.

Dave


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## jampott (Sep 6, 2003)

i got a good "one account" deal with the Woolwich...... better than IF and Virgin's rates by quite a way at the time...


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## Guest (Apr 13, 2003)

I'm with Bank of Scotland which I think is the most flexible around - up to 6 month's payment holidays in any 12 month period. Though not sure if this one is available since they merged with Halifax.


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## Major Audi Parts Guru (May 7, 2002)

> i got a good "one account" deal with the Woolwich...... better than IF and Virgin's rates by quite a way at the time...


I'm just in the process of re-mortgaging with The Woolwich,got a blinding deal too ;D


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## saint (Dec 6, 2002)

Get a low fixed - some great rates - have seen as little as 2.1 % for a year no penalties.


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## vagman (Sep 6, 2002)

Fixed Rates are for short termers and are very rigid.

Flexible Repayment Mortgages or Current Account Mortgages should be the type of mortgage most people should be going for.

The benefit of a CA mortgage is that you can have all your borrowings at the one rate, not just the mortgage. Putting your savings onto such an account means that you will pay less interest. If you keep your savings in a savings account then you will receive an inferior rate and pay tax on what little interest you will earn as well.

Remember, the more you pay towards your mortgage, the quicker you repay your loan and the less interest you will pay over the term.


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## scoTTy (May 6, 2002)

Bike,

I am in exactly the same position. Seriously looking at going back to First Direct now that they have "Smart Mortgages" at a better rate than OneAccount.


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## KevinST (May 6, 2002)

Coventry are offering 3.99% capped until end of 2005, pay any extra you want, come out of the scheme any time you want.
Abbey have a 0.5% over BoE base rate for life of mortgage... can't remember the penalties though.

Don't forget that in the budget they mentioned fixed rate mortgages for life, sponsored by the government so make sure that whatever scheme you go for you have the ability to get out cheeply if you fancy a fixed rate for life mortgage (obviously depending on what rate they fix it at!!).
Dad had a fixed rate mortgage from Berkshire County Council some 35 years ago... ended up paying Â£7 per month... refused to pay it off until the end of the 25 year period :


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## Guest (Apr 14, 2003)

have to say i can recomend smartmortgage from first direct....cant believe how fast ballance is coming down compared with old style mortgage with northern rock...... 8)


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## mike_bailey (May 7, 2002)

Thanks for the feedback guys.

I was very excited when I looked at the Coventry BS deal but closer examination appeared to reveal that it's not an offset mortgage(?) so would probably cost me more and there doesn't see to be a way of getting your money back out should you need it(?)

I'm finally down to 2 namely Brittanic and First Direct, if anybody else has any info I'm missing please let me know.

Cheers.


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## IanWest (May 7, 2002)

Mike et al,
Feel free to get in touch as you can speak to our mortgage broker. We don't charge any fees and he will do the running around for you. We earn enough from the lenders just for placing the business. 
If the amount borrowed is more than Â£200k we will also give a kick back to the client.
Ian


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## KevinST (May 6, 2002)

Thanks for the offer Ian.. a bit late for us though as we had the valuation survey done yesterday for the mortgage, and hope to be exchanging contracts etc etcin the next week or so :-/

Decided against an offset mortgage for us as we don't plan to have any savings for the next couple of years (except the emergancy fund) to help offset.


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## hutters (Jul 16, 2002)

We have a FirstDirect smartmortgage and had no problems, even when we wanted to increase the limit that they had approved, just one phone call and it was all done 

Also, it's not just about having savings to offset against borrowings, each day that unspent salary is sitting in current accounts, it reduces interest charges.


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## IanWest (May 7, 2002)

Just had a meeting with our broker and was so impressed with Northern Rock's latest offering that I have just completed the forms.
You have a totally flexible mortgage in that you can pay in money at any point and also pull out as much as you want and interest is calculated daily. The difference between this and the others is that the advantage is that you can maximise your borrowing at the beginning so that you have the money available if you need it suddenly in the future.


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## vlastan (May 6, 2002)

> Just had a meeting with our broker and was so impressed with Northern Rock's latest offering that I have just completed the forms.
> You have a totally flexible mortgage in that you can pay in money at any point and also pull out as much as you want and interest is calculated daily. Â The difference between this and the others is that the advantage is that you can maximise your borrowing at the beginning so that you have the money available if you need it suddenly in the future.


And what is the rate?


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## mike_bailey (May 7, 2002)

> And what is the rate?


They're doing 2.74% fixed for 6 months, 4.59% (85% mortgage) to 1/6/05 and 4.79% (95% mortgage) to 1/6/05.

I printed out all the rates and deals for flexible mortgages from http://www.moneyfacts.co.uk. I can't recall why I crossed them off of the list - might be because the deal of 4.59% is so close to the FirstDirect rate of 4.6%. Incidentally, the OneAccount has the same facility to "maximise your borrowing at the beginning" and this can certainly be a comforter.


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## vlastan (May 6, 2002)

I have an Abbey loan and it is variable discounted....it is only 4.05 % at present.

But you can find even cheaper these days.


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## KevinST (May 6, 2002)

Nick, If there's no penalties of moving your mortgage, I would talk to Abbey and explain that unless they put you on one of their better rates you'll move!
We were offered 0.3% below BoE base rate for the next 2 years if we went with AbbeyNational - 3.45% for 2 years.


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## vlastan (May 6, 2002)

Kevin,

I was thinking about this myself. I know that I have a loan for 5 years which needs another 16 months to expire. But I am not sure about any penalties at the moment and if they will still apply if I move to another Abbey loan.

I will give them a ring to check.


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## mike_bailey (May 7, 2002)

> Nick, If there's no penalties of moving your mortgage, I would talk to Abbey and explain that unless they put you on one of their better rates you'll move!
> We were offered 0.3% below BoE base rate for the next 2 years if we went with AbbeyNational - 3.45% for 2 years.


Hmmm, I just talked to OneAccount and they simply didn't give a damn about losing me.


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## IanWest (May 7, 2002)

You might get better rates through an IFA rather than talking direct. It's madness but with my portfolio mortgage for my rental properties, I am charged and arrangement fee if I deal direct and yet there is no fee if I use our broker and they also pay him a procuration fee so it costs them more!
Abeey are always flexible along with C&G if you ask nicely. The easiest way to do it rather than threaten to leave where they get a nice redemtion penalty is to agree to the existing redemption terms but ask for a better rate.


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## Justhe1 (Jul 2, 2002)

I've also just managed to remortgage with the Abbey, and they have revoked most of the Â£3.5k redemption penalty if I stayed with them.

I took out a 2 year deal at -0.21% below BoE rate - works out to 3. 54 variable . interest only. Then plan to throw more money at it and change in 2 years time.

Muck better that the capped deal i was in paying 5.75% :-/!!


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## vlastan (May 6, 2002)

> I've also just managed to remortgage with the Abbey, and they have revoked most of the Â£3.5k redemption penalty if I stayed with them.
> 
> I took out a 2 year deal at -0.21% below BoE rate - works out to 3. 54 variable . interest only. Then plan to throw more money at it and change in 2 years time.
> 
> Muck better that the capped deal i was in paying 5.75% :-/!!


I called Abbey today too. They said that I am tied up to this rate till September 04. The lady on the phone was asking me if I wanted to talk to the other department to see what deals they had. I said no as the redemption penalty was 5.2k and it too much.

Could it be that the other people could cover this penalty on my behalf then? Perhaps I should give them another ring tomorrow then!


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## thorney (May 15, 2002)

My redemption period comes to an end this month, whats the outcome from this discussion, should I go to a flexible account or what?

Advice appreciated, with all the baby shite going on my brain has died ???


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## vlastan (May 6, 2002)

Fully flexible accounts are flexible...but expensive.

So you may be better off just getting a discounted deal that allows you to make overpayments and underpayments whenever you want.


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## scoTTy (May 6, 2002)

Can you expand on why they are expensive?

Surely netting off and credit against debt makes for savings not increased costs?

Confused.... ???


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## Justhe1 (Jul 2, 2002)

scoTTy,

After much looking around it became clear that although flexible mortgages are, um, flexible  - ie you can offset savings, make overpayments via the net etc the rate you can get will never be as low as a discounted rate or fixed rate mortgate (IMO).

It was cheaper for me to get a discounted interest only mortgage on a low rate (3.21% variable for 2 years with no extended tie in) and to just pay chunks off of the capital with monies I have from bonuses, etc. Esp as in the early years of a repayment mortgage you pay of next to none of the capital...

That was what I found best for my situtation, but i guess its horses for courses... :-/


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## vlastan (May 6, 2002)

> I've a OneAccount mortgage at the moment but I'm thinking of changing because the mortgage rate is 4.95% and there seems to be plenty of better rates out there.
> 
> It has to be flexible because me earnings is erratic, anybody got good advice on where I might turn up a good deal?


Scotty,

This is why they are expensive...the interest rates they offer is too high at the moment. And this what triggered the whole thread too!


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## IanWest (May 7, 2002)

You need to check the small print regarding over payments. Most of them will allow you to make overpayments but sometimes the interest is only recalcualted once a year which means that your money sits in their account and doesn't reduce your borrowings. Also some have redemption penalties which include making an overpayment because you are effectively redeeming some of the mortgage.
This has been introduced to stop people paying back all bar Â£100 of a mortgage and switching to a better deal with no redemption penalty as the mortgage is effectively still there. Obviously I never used to do that ;D


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## vlastan (May 6, 2002)

As Ian said...check the small print always!

I only have 80k left in my mortgage and I can make overpayments up to 10% in a year. So far I haven't used it as I didn't have 8k standing about at any time.

Most of the mortgage companies now use monthly calculation of the interest...but if they don't...avoid them.


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## Steve_Mc (May 6, 2002)

As for flexible mortgages being expensive, yes they are, but ONLY if you don't use all the features. The most useful feature is the offsetting. I have my mortgage with IF @ 4.75%. For the sake of argument let's say my mortgage is Â£100k (I wish :) and I have Â£25k in savings ( : ;D), then I only pay interest on the balance of Â£75k. Or to put it another way I am receiving 4.75% on my Â£25k savings - not only that, but I am receiving it tax free, so to a 40% tax payer the savings rate is effectively 5.7% (4.75% grossed up by 20%).

The other features, such as over and under payments can be captured in other mortgage deals , without going along the full flexible route, at cheaper rates. The fully flexible route is only worth considering if you wish to make non-regular payments *AND* use the offsetting facility, through which you will reap the benefits to outweigh the higher rate.

Steve


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## scoTTy (May 6, 2002)

Thanks for the thoughts. It seems I am still ok with it then as I make payments way over the odds every month and occassional bigger ones.

I guess it shows there's no idea solution for everyone. I'm happy I have the right sort all I need to do now is select the best one!


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## vlastan (May 6, 2002)

Normally these accounts are suitable for people with irregular incomes. So contractors that some months earn more and some nothing. Also people that get large bonuses will benefit from this.

Scotty how much is your interest rate?

My variable discounted is 4.05%.


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## scoTTy (May 6, 2002)

4.85%

The thing for me though is that if I hadn't been on this type of mortgage I wouldn't have been able to pay off Â£40k over the last four years above the scheduled payments.

As I say it's working for me and the low interest rates just mean I'm paying more and more off the capital every month 

The thing with interest rates now is it's really hard to compare between the types of mortgage. Also mine has been dropping on the day the BoE have announced the rate changes and interest has been calculated daily. When I was with the Halifax I could wait nearly a month. The amount of my salary going in and affecting the "loan" amount on a daily basis means you can't really do a straight percentage comparison.

i.e. With your discounted rate you have to factor in that the amount in your cheque account is effectively not off your mortgage hence your paying interest on it.

As previously mentioned, there's not one solution for all of us.

I've just seem First Direct's smartmortgage is at 4.6% (4.7APR) so it may be worth swapping. :-/


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## mike_bailey (May 7, 2002)

> I've just seem First Direct's smartmortgage is at 4.6% (4.7APR) so it may be worth swapping. Â :-/


After doing plenty of number-crunching I'll probably change to the SmartMortgage.


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## R6B TT (Feb 25, 2003)

I went thru this last September - came down to IF, FirstDirect SmartMortgage or the Yorkshire Building Society Offset.

In the end I went for the Yorkshire - 0.75 over base guaranteed for 5 years I think - they have a sparate Mortgage and Savings pot so it doesn't feel as though you are completely skint. It is very flexible, and cost me nothing over 2 phone calls to arrange.

I considered FirstDirect very hard as I bank with them, but decided I didn't want them knowing everything about my finances! So, on payday a lump of money goes into the YBS Offset savings account - which takes Direct Debits so I pay the mortgage and regular bills from that account and in the meantime it's offset against the mortgage balance which is calculated daily. If (touch wood I won't) I were to lose my job First Direct would know straight away - but the Yorkshire won't because the 'emergency fund' in the offset will cover for a while.

Hope this helps - you seem to have covered most options but the Yorkshire may be worth a look.
Rob


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