Ensuring my mortgage is flexible - paying off lump sums, etc.

[ndp]

I am about to take out a mortgage (LTV mortgage with National Irish Bank).

Is there anything I should do to ensure that I can make flexible mortgage repayments, for example being able to knock off a few grand from the principle if I have spare cash.

Is there anything else I should be thinking about in relation to setting it up at this stage of the process?

Many thanks for advice you can give.

 

[ClubMan]

Any variable/tracker rate owner occupier mortgage should be as flexible as possible. You cannot be penalised for making accelerated lump sum or regular capital repayments on such a loan. Some lenders may have specific policies on the minimum lump sum which they will accept or about how they handle regular capital overpayments. Otherwise when you want to make an unscheduled lump sum or regular capital repayment then you should just agree this in writing with your lender and get confirmation of same. Also of how this will impact the mortgage (e.g. reducing the effective term - which is the best approach in terms of reducing overall costs - or reducing the ongoing schedule repayments but keeping the term the same). As ever - read the terms & conditions of your mortgage agreement BEFORE signing it and put any questions that you still have to your lender and/or broker or solicitor.

 

[twofor1]

I often make extra payments of various amounts to my NIB LTV mortgage, simply transfer it online into my mortgage a/c, balance drops instantly and you only pay interest on the reduced balance from that day. Couldn’t be simpler and everything is transparent.

I think though NIB are the exception in this regard, with any other lender I would take Clubmans advice.