The first decision to make for most people is whether they want to repay some of their mortgage capital every month or just pay back the interest they have incurred. It is very important to consider this carefully because at some point you will have to repay a mortgage and you need have firm plans in place to do so. If you opt for an interest only mortgage you should be sure you will have the means to repay the whole mortgage once the term is over. This can be done through endowments, pensions or other investment means but if in any doubt you are advised to take professional financial advice.

The type of mortgage that everybody ends up with if they just forget about their mortgage for a few years and assume they are on a reasonable deal. More often than not these mortgages are not on competitive rates of interest and most people should take a regular look at their deal and compare it to the current mortgage offers available.

With a fixed rate mortgage the rate of interest chargeable is fixed for a period of time after which it reverts to a normal variable rate mortgage. With this type of mortgage you and the mortgage company are effectively gambling of the future movemment of interest rates. If normal rate go above the rate at which you have fixed you are better off, but if the opposite happens you lose out. Do you feel lucky? The main reason why people select this type of mortgage is not because they like to gamble but because they want the security of knowing exactly how much their mortgage is going to cost for a period of time. The more attractive rates are typically available for shorter periods of time. Don't forget the mortgage companies are likely to be better than you at predicting future interest rate movements so chose carefully.