With the mortgage market providing increasingly more choice, it is becoming more important to decide the type of mortgage that best suits your needs.

Variable rate

• Payments will go up and down as lenders change the interest rates, which will be largely influenced by changes to the Bank of England base rate.

• Some lenders will make the change to your payment as soon as the rate change takes effect, whilst others will adjust your payments just once a year based on any increases or reductions in the interest rate over that period.

Capped rate

• Similar to a variable rate, however your rate will not exceed a specified upper limit for a fixed period, even if interest rates rise beyond that point.

• An arrangement fee may be charged by the lender.

• An early repayment charge may apply.

Fixed rate

• Provides you with the option to fix your rate for any period between 1-25 years, however each lender may have only a limited range of options.

• Generally the shorter the term of the fixed rate, the lower the interest rate.

• At the end of the fixed rate period, some lenders may offer an extended fixed rate option otherwise the rate will return to the Lender's standard variable rate.

• An arrangement fee will often be charged by the lender.

• An early repayment charge may apply.

Discounted rate

• For an agreed limited fixed period, the lender will apply a discount off their standard variable rate.

• Generally, the shorter the discount period the larger the discount.

• An arrangement fee will often be charged by the lender.

• An early repayment charge may apply.

Flexible mortgage

• May allow you to vary your payments within given parameters.

• Payment holidays may also be a feature with some lenders.

• More flexibility in payments may enable you to pay off your mortgage earlier if you make overpayments.

Cash back mortgage

• You will receive a cash lump sum usually at the commencement of your mortgage. This will often be an agreed percentage of the amount that you borrowed.

• An early repayment charge may apply.

• Some or all of the cash back may have to be repaid upon early repayment of the mortgage.

Base rate tracker

• The lender agrees a rate linked to the Bank of England base rate in the form of either a loading or discount for a set period.

• The Bank of England review the base rate every month, although the reviews do not necessarily result in a change of rate.

• An arrangement fee may be charged by the lender.

• An early repayment charge may apply.

Your home may be repossed if you do not keep up repayments on your mortgage

A fee of up to 1.5% of the mortgage loan may be charged depending on your individual circumstances a typical fee is £149.00