This is a type of repayment mortgage which lets you make regular overpayments and underpayments without any penalties. This is excellent if you find that your income has increased or you find that you suddenly have some spare cash because you can make lump sum payments, again without penalty. This type of mortgage usually has interest calculated daily instead of annually. This means that every time you make an overpayment you immediately affect the amount of interest you pay. If you do this on a regular basis you can potentially knock years of your loan term.
