Very few people can afford to buy their first home outright, the vast majority of us need to take out a mortgage to borrow the money. Finding the best mortgage deal requires both time and patience due to the amount that needs to be considered. That’s why we hope we can answer your questions and help you find the best deal.

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Mortgages are different from other types of loan because it is normally larger and repaid over a longer period, typically 25 years and secured against the property. So if you can’t keep up the repayments, then the lender can repossess your home and sell it to try to recover the money you owe them. Taking out a mortgage is a very serious commitment and certainly not something you should rush into without a sound understanding of the issues surrounding the various mortgage offers.

Probably one of the biggest decisions is how you intend to pay back the amount you borrow. You have two main mortgage types to choose from.

• Repayment: with this you pay off both the interest and the capital over the life of the mortgage, so it's guaranteed that by the end of its term you will have paid off the mortgage. With these mortgages you usually spend the first few years paying of interest and charges, making them unsuitable if your likely to move within the first 5 years.
• Interest only: with this type of mortgage you only pay off the interest with each mortgage payment. Then at the same time you also set up another method of paying off the mortgage (repayment vehicle) such as an ISA, pension plan or endowment policy.

Once you've chosen the best type of mortgage the next major decision is what interest rate to have on your mortgage. There are four types of interest rate options.

• Fixed rate: the interest rate is fixed for a set number of years (usually five). You know exactly what your monthly repayments will be while the rate is fixed. Beware that the rate often returns to the standard variable rate at the end of the fixed term and there may be penalties for moving to a different mortgage.
• Variable rate: this is the standard rate offered by all mortgage lenders. It will move with changes in interest rates. So, you will benefit if interest rates fall, but lose out if they rise. Standard variable rates tend to be higher than fixed rate deals at the moment.
• Capped rate: similar to fixed rates, it is guaranteed that the mortgage will not rise above a certain rate but it may fall. As a consequence capped rates tend to be higher than fixed rate deals. In the same way as a fixed rate mortgage, the rate will be capped for a fixed term and there may be penalties if you want to re-negotiate away from the variable rate at the end.
• Discount rate: you pay the variable rate minus an agreed discount for a fixed period, this period is usually one or two years. Discount rate mortgages can be useful if you are on a tight budget because of the lower initial payments.

The other serious decision is deciding on a mortgage term. The difference in the amount you pay out in interest charges between a 15 and 25 year mortgage can be in the tens of thousands. In short the longer the mortgage term the more it will cost you. However longer mortgages have smaller and easier to manage monthly repayments.

More information on mortgages will shortly be available to you as we hope to have mortgages 365 completed over the next couple of months.