A quarter of those with flexible mortgages are either overpaying by 100%, or adding lump sums to reduce their mortgages.
According to research undertaken by the Council of Mortgage Lenders and the Office of the Deputy Prime Minister, low interest rates allow borrowers with flexible mortgages to achieve savings.
Borrowers are also using the mortgages as a form of cheap finance, with one in five using them to draw down equity in their property, usually by withdrawing a single lump sum. But nearly half of those with a flexible mortgage have not used any of its features.
James Mayne, strategic development manager at Britannic Money, said: ‘We find usage of mortgage features increases over time. Once borrowers are comfortable they try out some of the features ‘ such as overpayment ‘ see the benefits, and make more use of them.
‘A number of flexible mortgages are sold on the rate and lack of redemption penalties, rather than the features. We find it depends on the advice given at the point of sale. Some advisers are keen on the features of these mortgages, which means their customers start using them immediately.’