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Mortgage talk

Choices, choices; decisions, decisions. Playing the mortgage game is not dissimilar to Who Wants to Be a Millionaire – each of the myriad choices you must make have several tempting options, and if you opt for the wrong one you'll be cursing yourself for a long time to come.

We're talking about the choice between a repayment or interest-only mortgage. In some circumstances, you can opt to only pay the interest on the loan, which will bring down your repayments significantly. But at the same time, you won't be chipping away at that loan, and the interest won't ever go away. So you may as well be renting really.

Is it best to go for a fixed-rate mortgage, a tracker deal or lenders' standard variable rates (SVR)? With rates set at the lenders' discretion, SVRs are the least secure. Trackers follow the Bank of England base rate, so can rise and fall according to the whim of the economy. The only really secure option is a fixed rate, ensuring payments stay the same through the duration of the deal, be it two or five years.

Seeking independent financial advice is probably a good idea, especially seeing as though lending restrictions are very tight at the moment. You can also contact a mortgage broker who will help you sort out the right kind of product for you. But at the same time, doing your research is important. Also, and this is where a mortgage broker can help, make sure you look out for hidden charges beyond the original arrangement fee. These can be anything from charges for falling into arrears to booking and valuation fees.

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