Repayment mortgage

Each monthly payment pays off a little of the underlying debt, as well as interest on the loan. At the end of the term the mortgage is cleared.  

Interest only mortgage

Each month you pay interest on the loan but not the capital. At the end of the mortgage term you are expected to repay the capital, how you fund this is your business.  

Variable rate 

The mortgage rate changes every time interest rates change, the overall effect of any interest rate changes is calculated once a year and payments are altered accordingly.    

Fixed rate 

The interest rate is fixed for the period agreed - often two to five years. These are ideal for budgeting or if you think rates might increase. You do not benefit if rates fall, and will normally face penalties if you try to quit.  

Capped rate 

These are fixed, but if rates fall you pay the lower rate. Such deals can be a good for budgeting.  

Discounted rate

Under this type of mortgage the borrower is offered a discount off the lender's variable rate. The rate paid will fluctuate in line with changes in the variable rate. The discount applies over a set term.  

Cash back deals 

This is when lenders offer money back if you take out a particular product. However, nothing comes free in life and cashback mortgages may be weighed down with hefty penalty charges if you later want to switch lender.  

100% mortgage 

Borrowing the full amount of the purchase price, normally carries a higher interest rate, you may get tied in and will probably have to pay additionally for a a mortgage indemnity guarantee policy. 

Base rate tracker 

These can be complicated but in essence they track the Bank of England base rate plus an agreed amount typically for a set period. 

Flexible

These allow you to be flexible with your payments according to your future circumstances/ needs without having to pay a penalty. Typically it might allow the following without penalty: - over and under payments - payment holidays - and borrowing back on payments. Make sure there isn't a minimum amount you have to pay or a limit to the number of any over/under payments

Offset  

Your mortgage account effectively becomes your bank account. You get a chequebook, direct debit facility, credit & cash card and regular statements etc. Your earnings are paid straight into this "mortgage/bank account". This means that effectively you pay less interest on your mortgage because your earnings are being used to "pay back" the loan.