The majority of borrowers only consider using their flexible mortgage to pay the loan off early once they have taken one out, according to Chelsea Building Society.
In a survey of its Flexiplan customers, the lender found 29% had made overpayments, with a further 57% intending to use the facility in future. However, when asked the main reason for taking out a flexible product, only 28% gave flexibility, including underpayments and payment holidays, as the reason for choosing the mortgage.
Matthew Cape, public relations and corporate affairs controller at Chelsea, said: ‘Facilities people look for when choosing a flexible mortgage are not necessarily the ones they come to use. The maj-ority plan to make overpayments, showing their confidence in managing their own finances.’
The results also found the majority of borrowers do not use all the facilities available on their flexible mortgage. The most under-used facility is underpayment. Only 2% had underpaid and 3% intended to underpay in the future. Payment holidays were only used a little more. Just 8% of borrowers had taken one with 14% intending to do so.