FIXED RATES:The interest you pay will stay the same for the period of the fixed rate - usually one, two, three, five or 10 years - meaning your repayments will not fluctuate. These are popular with first-time buyers, but early redemption penalties apply.
STANDARD VARIABLE RATE:The interest rate - and therefore the mortgage repayments - will move up and down, usually in response to changes in the European Central Bank (ECB) base interest rate. Lenders might also increase the rate if they want to enhance their profits or cut it to compete with rivals.
TRACKER MORTGAGES:Tracker rates are variable rates that remain within a set margin above the ECB rate: the lender guarantees to pass on increases and decreases in the ECB rate to homeowners.
These rates tend to be lower than standard variable rates.
SPLIT INTEREST:Many lenders now offer "mix and match" facilities, where homeowners can choose to put part of their mortgage on a fixed rate and part of it on a variable rate. This gives them some flexibility to make overpayments.
INTEREST-ONLY:With a normal mortgage, repayments are comprised of capital plus interest. Under an interest-only loan, borrowers repay only the interest, meaning repayments are lower. No dent is made in the original sum borrowed, which will push up repayments once the interest-only period expires.
