• With this type of mortgage the monthly repayment is made up of an interest element, which is paid on the amount borrowed to prevent the debt from growing, and an amount of capital, which reduces the amount of the loan.
• If all payments are maintained until the end of the term, then the amount of debt will have reduced to nil, all payments will cease and the mortgage will be repaid.

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• With this type of mortgage the monthly repayment is made up of an interest element, which is paid on the amount borrowed to prevent the debt from growing, and an amount of capital, which reduces the amount of the loan.
• If all payments are maintained until the end of the term, then the amount of debt will have reduced to nil, all payments will cease and the mortgage will be repaid.

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• This type of mortgage provides guaranteed monthly payments for a predetermined period of time.

• If you would like the certainty and the reassurance of knowing exactly what your monthly outgoings will be, then a fixed rate mortgage may be most suitable for you.

• A fixed rate mortgage sets the interest rate that you will pay for a specified period, guaranteeing the amount payable each month for a fixed length of time.

• Once the fixed time period expires your mortgage repayments switch to the mortgage lender's standard variable rate. This arrangement will enable you to more accurately forecast your budget during the initial years of your mortgage term.

• In addition, if the interest rate rises above the fixed rate that you are paying, you will actually save money. However, the reverse of this is also true. If the interest rate goes down whilst the fixed rate deal is in place, you will end up paying more.

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• A capped rate mortgage puts a maximum limit on the interest rate that you have to pay. You therefore gain the security of having a 'ceiling' or upper limit to the amount that the lender can increase the interest payable on your mortgage.

• This period of capped interest is for a specified period only; typically between one and five years. At the end of the specified period your mortgage will usually revert to a variable rate.

• However, it is possible to find a capped rate mortgage that can last for the entire life of the loan. Although this arrangement initially sounds attractive, some capped rate mortgages also have a 'collar' or lower limit below which the interest on your loan cannot fall.

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• With a Tracker mortgage the rate of interest you pay is tied to the base rate set by the Bank of England.

• Typically the tracker mortgage rate will be set as a percentage above the base rate and although the resulting interest rate is usually lower than a mortgage lender's standard variable rate, this will vary from lender to lender. A main advantage of a tracker mortgage is that the difference between the variable rate and the base rate is usually a lot smaller than the margin between an standard variable rate mortgage and the bank base rate so you will end up paying less overall.

• In addition, if the base rate falls, the interest payments on your mortgage loan will fall accordingly, no matter how low the base rate goes. However, remember that the bank base rate can rise as well as fall which can make budget planning difficult.

• Self-certification (self cert) is a simple way of detailing your income without having to provide proof of income - you simply self declare what you earn. A gentle word of warning though, it is a criminal offence to declare a false income to obtain a mortgage.
• Self Cert mortgages are designed for people whose income is difficult to assess using the standard methods adopted by most conventional mortgage lenders. The specialist mortgage lender will be far more accommodating and they appreciate that different working patterns require a more flexible approach.
• Self Cert mortgages have become extremely popular with the changes in work practices in the last few decades; especially for those dependent on bonuses for a sizeable portion of their income or workers on short-term or part-time contracts.
  Self certification does have its limits though - most mortgage lenders will only allow you to prove your income in this way if you want to borrow less than 75% of the property's value, so you will need to put down a substantial deposit. However, some mortgage lenders may allow you to borrow up to 85% on a self-certification basis.