For many years, credit cards were flexible, mortgages were not. But times are indeed changing. If, as expected, the Irish lending environment begins to look more like that in the rest of Europe, borrowers should be able to look forward to a period of relatively low and stable interest rates.

In such a climate, where there is little difference in the rates on offer between lenders, issues such as charges and flexibility are likely to take on greater importance. Already, many of the lending institutions have tailored their home loan packages to better meet the needs of borrowers, in both good times and bad.

Against a background of falling interest rates, more flexible repayment options are of particular interest to those borrowers who were managing just fine with their repayments before the latest round of mortgage interest rate reductions. With demand deposit rates as low as 0.2 per cent, it makes little sense to stick the money they will now save on their mortgage each month into an ordinary savings account.

Among the options open to them is to reduce debt - and for those with low levels of consumer debt, reducing their mortgage is an option well worth considering. Even a small increase in the repayments over and above the amount due can have a significant impact on the cost of a mortgage over its full term.

EBS Building Society estimates that the monthly repayments on a £50,000 mortgage with 18 years outstanding were £410.68 before the first round of rate reductions in October. Following the fall in the building society's variable rate to 6.35 per cent from 7.1 per cent, the monthly repayment fell to £388.99, a saving of £21.69 a month.

However, borrowers who decide to maintain their payments at the pre-October level would typically reduce the term of their loan by 21 months, saving around £4,000 in interest payments in the process. EBS has yet to respond to the Central Bank's second rate cut so the potential savings to be made, by those who continue to pay at a rate of 7.1 per cent, are quite considerable.

First Active offers an interesting variation on the early repayment theme, where it allows borrowers to withdraw overpayments of up to five per cent of the original home loan if they need the cash. They can also use the sum overpaid to fund payment breaks. However, if borrowers overpay by more than five per cent with a lump sum, it is capitalised to the mortgage and cannot be accessed again.

Those with more on deposit than they are happy with in a low interest rate environment also have the option of using a lump sum to reduce their mortgage. This is a particularly attractive option for the more risk-averse, who are loath to put their money into high-risk or long-term investment options such as equities. Again, the savings are quite dramatic.

A lump sum of £5,000, used to reduce the sample EBS mortgage of £50,000 with 18 years left to run, would reduce the term by 36 months, saving the mortgage-holder £11,000 over the full-term.

In addition to reducing the interest paid by the borrower over the life of the loan, reducing the mortgage also increases the amount of equity the borrower owns in his home. As a result, if the home owner decides to sell, he has less to pay back.

Most of the lending institutions now allow borrowers on variable rate mortgages the option of maintaining or increasing repayments, or of reducing their mortgage with a lump sum. The process is relatively painless - it generally involves just informing the lender - and is usually free of charge. Those on fixed-rate mortgages are less lucky, however, and generally have to stick to the terms of the contract until it expires before they can vary repayments without penalty.

Greater mortgage flexibility does not just favour those who are doing well financially, however. Increasingly, many lenders are offering payment breaks to those who are under financial pressure or face changing circumstances.

ICS Building Society, for example, allows customers to take a break from mortgage repayments for three months, up to four times during the life of the mortgage. This is particularly useful for people who are facing periods of heavy expenditure, such as that associated with the birth of a child.

And while it's too late for this year, those who find that the festive season places a particularly heavy burden on their pocket could consider the option now offered by some lenders of making their mortgage repayments just 10 or 11 times a year.

This frees the borrower from repayments during those times of the year when spending is at its highest - such as holiday time or Christmas.