Flexible mortgages recalculate the outstanding capital and interest (the amount you owe) on a daily basis. This allows you to make overpayments when you have money to spare, and see an immediate reduction in your loan.

Some also allow you to make underpayments when finances are tight, which will increase the interest you have to pay in the long term.

They may even allow you to take repayment holidays – a complete break from making payments as long as a reserve amount of money is in your account.

Any unpaid interest will be added to the outstanding mortgage; any overpayment will reduce it. Some flexible mortgages have the facility to draw down additional funds, to a pre-agreed limit.