Watch out for a high price for flexibility

Whilst flexibility is of course a desirable thing, borrowers need to be wary. Flexible deals often carry a higher interest rate than their more conventional cousins - as much as 1% higher.

The danger is that you are paying a higher rate and not making use of, or needing, all the flexibility the mortgage offers. Often the only feature that is really coveted is the ability to make overpayments without incurring a penalty and with no intention of drawing these funds back down.

Many lenders now offer penalty-free overpayments of as much as 10% of the mortgage each year on all their products. This is often quite enough - and those who have no intention of making use of the other facilities would be better off with a lower interest rate.