With both types of mortgages, repayment or the interest only, the client has a choice as to which interest rate option is best for their particular circumstances.

There are two main interest options:

• VARIABLE RATES

• FIXED RATES

VARIABLE RATES:

• With this type of mortgage, the rate of interest charged will vary from time to time in line with any movements in the overall interest rates

• From the borrower's point of view his monthly repayments can vary up or down depending on interest rates. Obviously it can be to his advantage if interest rates fall and conversely if they rise

FIXED RATES:

• The borrower is offered a fixed rate of interest for a fixed term

• This rate is guaranteed and remains unaltered despite changes in overall interest rates

• The length of the fixed rate is agreed at outset between the lender and the borrower. It could be anything from a few months to 10 years. Most common fixed rates are for 2 to 3 years

• The scheme has the particular advantage that the borrower knows his exact mortgage outlay for a fixed term and is not going to be subjected to a sudden shock of increased payments following an interest rise