What type of mortgages are available to me?

There are two issues here to separate:

1. Repayment type
2. Type of interest you will be charged

The repayment type determines how you will repay your mortgage at the end of the term or before. Irrespective of which you choose you will then need to decide to choose the type of rate based on your circumstances and the prevailing markets

1.Repayment Type

The two main ways to repay your mortgage are ‘repayment’ and ‘interest only’. With a repayment mortgage you make monthly repayments for an agreed period (the ‘term’) until you’ve paid back the loan and the interest.

With an interest only mortgage you make monthly repayments for an agreed period but these will only cover the interest on your loan. You’ll normally also have to pay into another savings or investment plan that’ll hopefully pay off the loan at the end of the term.

By and large the payments are not dissimilar and the advantages and disadvantages are what separate the two. The real issue after that is the type of interest:

2.Type of Interest

• Standard variable rate mortgage
• Tracker mortgage
• Fixed interest rate mortgage
• Discounted rate
• Capped rate
• Collared rate
• Standard variable rate with cash back
• Flexible mortgage

So what do they mean to you?

View the links in this section for more information on each of these interest types.

For truly independent advice from the FT Adviser, UK Mortgage Broker of the Year for 2005, 2006 and 2007, complete our enquiry form or feel free to call us in confidence on 0800 0112825.