This is a beginner’s guide to choosing a mortgage. It does not tell you everything you need to know so you should also read an independent book or pamphlet on the subject.

One thing that almost all mortgages have in common is the repayment period - normally 25 years, depending on your age and other circumstances.

You will probably need to borrow 95% of the share of the property that you are buying. Your building society will work out your monthly payments based on the amount you borrow. The repayment will change if the interest rates change.

To make a wise decision about the different mortgages available, you need to know a little about them.

Here, you borrow an amount of money and pay the interest on it. At the end of the mortgage period you will have to find a way of paying back what you borrowed. There are various ways of doing this and you should get advice on which is best for you.

With this mortgage you pay the interest every month and at the same time pay into an endowment fund. This is a form of investment saving and the idea is that your endowment grows over the years to cover the amount you borrowed. It might even have enough left to give you some cash in hand. But of course the profits can never be guaranteed and if the endowment doesn’t grow fast enough, you will have to find another way to make up the difference. This will usually be by extending the mortgage.

This type of mortgage also aims to build up a lump sum to pay off the money you have borrowed. In this case, monthly payments above the interest payments go into an investment fund which aims to build up enough to pay off the amount you borrowed, which would include a payment for life assurance.

This type of mortgage will allow you to build up enough to pay off the mortgage early if the investment proves good enough. But the value of units can go down as well as up and there are no guarantees.

In this case you pay into a personal pension which will pay off the amount you have borrowed. You pay into the pension fund and when you reach retirement age, the fund should have enough profit to pay your pension and give you a lump sum to pay off the mortgage.

The law says you cannot start drawing your pension before you are 50. If you take out a pension mortgage when you are under 25 you may have to have a mortgage that is longer than 25 years.

A pension-linked mortgage is the most tax efficient of all types an offer. You get tax relief on the pension premiums and any life assurance that is included in the pension. No other life-assurance products currently get tax relief.

Not always. We can often help you to access 100% mortgages where you can borrow the full value of the share you are buying. These may also be available on Fixed Rates as well as the Lender’s Variable Rates.

Quite often, building societies make special offers to attract new borrowers. However, these are rarely as good as they seem. What the offer usually consists of is a combined package which includes mortgage and endowment policy, contents insurance and mortgage and protection insurance. Buying all these products from one organisation is unlikely to be good value and it may push up your monthly repayments quite alarmingly.

Building societies usually protect their interests by making you take out mortgage protection insurance. This is how it works. If you don’t pay your mortgage, the building society can sell your home to get back the money that they lent you. If the sale doesn’t raise enough money, the mortgage protection insurance will cover the difference. As the borrower, you will have to pay the premiums for this insurance.

In the case of shared ownership, your lease will contain a clause in which we guarantee to cover any losses your mortgage company suffers. This means you don’t need indemnity insurance, but your mortgage company may ask you for it after you are committed to buying your shared-ownership home. Watch out for this sort of hidden extra and ask us if there is anything you are not sure about.