The term flexible mortgage refers to a residential mortgage loan that offers flexibility in the requirements to make monthly repayments. The flexible mortgage first appeared in Australia in the early 1990s (hence the US term Australian mortgage), however it did not gain popularity until the late 1990s. This technique gained popularity in the US and UK recently due the United States housing bubble. The term mortgage acceleration is also used, as the mortgage loan can be paid off faster than standard mortgages if the borrower is in a position to do so. With traditional mortgages, borrowers often face large penalties for additional capital repayments or if payments were not made on time.
A specific type of flexible mortgage common in the United Kingdom is an offset mortgage. The key feature of an offset mortgage is the ability to reduce the interest charged by offsetting a credit balance against the mortgage debt, with interest charged based on the outstanding net debt. Some lenders have a single account for all transactions, this is often referred to as a current account mortgage.
Read more about Flexible Mortgage: Features, Offset Mortgages
Famous quotes containing the words flexible and/or mortgage:
“Freedom is the essence of this faith. It has for its object simply to make men good and wise. Its institutions then should be as flexible as the wants of men. That form out of which the life and suitableness have departed should be as worthless in its eyes as the dead leaves that are falling around us.”
—Ralph Waldo Emerson (1803–1882)
“Loosened from the minor’s tether;
Free to mortgage or to sell,
Wild as wind, and light as feather
Bid the slaves of thrift farewell.”
—Samuel Johnson (1709–1784)