Noel McLaughlin, of Butterfield Bank, replies:
A LIFESTYLE mortgage, often referred to as a call account mortgage, offers a bespoke solution for each client which caters to their personal requirements. Essentially, a lifestyle mortgage operates in a similar fashion to an overdraft facility.
This mortgage can be an appealing service to customers who need a more bespoke approach, due to its personalisation and flexibility.
A few of the key advantages of a lifestyle mortgage include the possibility of interest savings on the mortgage, the ability to repay the mortgage ahead of schedule without penalty and a flexible access to funds.
Having flexible access to funds is key, as repayments do not lock away capital, meaning that the customer can take money out or put money in as they need. The term of the mortgage is typically up to 30 years or pensionable age, whichever comes first, yet the mortgage can be repaid ahead of schedule. This is an appealing factor to consider when exploring options.
Another key attribute of a lifestyle mortgage is saving on interest. Currently, with interest rates at low levels, savings are not enjoying great returns. A more profitable use of savings could therefore be putting them towards this type of mortgage. The calculation for homebuyers will be whether the interest saved on paying off a mortgage is greater than the interest earned on liquid savings.
Flexibility is more important than ever in today’s landscape. People’s lives are often very complicated, so providing a lifestyle mortgage to suit personal needs ensures that homeowners ultimately have more control over their mortgage commitment.