* Repayment Mortgage: The payments you make to the lender every month pay off both the capital and the interest from the mortgage. Provided you keep up the payments, you are guaranteed to pay off the loan by the end of the term agreed (usually between 20 and 30 years). You usually pay off more interest at the start of the mortgage term and then gradually more of the capital debt. Therefore, in later years, you will be repaying increasing amounts of capital and reducing amounts of interest. It may seem as if this is costing more but that's because unlike the other types of mortgages you're paying off the capital and not just the interest. First time buyers will usually get a low start capital repayment mortgage where for the early years of the mortgage interest only is repayed. Most lenders also offer Flexible mortgages and 100% mortgages.

* Interest-Only Mortgages: An interest-only mortgage is where the lender only charges you interest on the loan you've agreed. You don't pay the capital back until the end of the mortgage term 25 years or whatever period agreed. The idea of this mortgage is that you pay the interest owed to the lender and save the capital repayments by investing them elsewhere. At the end of the mortgage term you will have hopefully made enough money from investments to pay the lump capital sum. This way you can possibly make a saving by investing capital that would otherwise be paid straight back to the mortgage lender. The lender may offer you an investment opportunity if you choose an interest only mortgage such as an ISA.

*Endowment Mortgage: Interest only payments are made on the loan. Payments do not include capital and therefore do not reduce the loan balance. A suitable endowment is arranged and premiums are paid to the life assurance company. At the end of the mortgage term, the proceeds of the life policy are used to repay the balance on the outstanding loan, although this is not guaranteed. The benefit of life assurance cover is included, (this will ensure that the mortgage is paid off in the event of premature death during the mortgage term), and you might also receive a lump sum at the end of the mortgage term.

* Flexible, current account and offset mortgages: Flexible, current account and offset mortgages give you more control to vary your monthly payments. They can be used with repayment or interest only mortgages. For example you can: pay less one month and more the next, make lump sum repayments (and sometimes draw these back),take a 'payment holiday and pay off your mortgage early.