Home Buyers Guide

Chapter 6: Choosing the Right Mortgage

Interest Only

Quite a few lenders offer an option to pay just the interest on your mortgage, either for a period at the start of the
mortgage (usually for 1 – 3 years) or in some cases for the whole mortgage term.

Like the deferred start mortgage, it can be useful to reduce your payments when you complete the property
purchase, due to the expenses you incur when you buy a home.

Overpayments

You can make regular or occasional extra payments to reduce your mortgage balance and the amount of interest
you’ll pay, with no penalties.

Pay your mortgage over 10 or 11 months, instead of 12.

There are expensive times of the year, like Christmas, when our budgets are stretched. With this option, the
lender would let you take these months off, and pay your mortgage over the remaining 10 or 11 months.

Mortgage holidays:

At some stage during your mortgage, you might want to take a break from paying your mortgage. Some lenders
will allow payment breaks for 3 - 6 months. This can be very beneficial during maternity breaks, career breaks, if
you’re made redundant or if you want to take time out and go traveling.

Note all lenders (or mortgage types) offer these flexibilities. It is important to let your mortgage adviser know
which of these options are important for you, so they can find a mortgage lender and mortgage type to suit you.

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