The amount you will be able to borrow from a mortgage-lender is dependent on three things – how much you earn, how much the property you want to borrow against is worth and how much the mortgage lender thinks you can afford.

In the past mortgages were nearly always for 25 years but things have changed and you now have a whole host of options. However, 25 years was the traditional option for a reason and this is still the best choice in many circumstances.

An important consideration when choosing a mortgage is what type to go for. Although there are many different names used by mortgage providers nearly all mortgages can be put in one of two categories.

Choosing how the interest on your loan will be calculated is a crucial part of selecting your mortgage and can be quite confusing for someone new to the subject. The interest rate can either be fixed at a set rate or can vary in accordance with changes to the Bank of England base rate. 

A fixed or discount rate deal can apply for anything from just a few months to your entire mortgage term (e.g. 25 years). Once the deal is over you will be transferred over to the lenders standard variable rate so choosing how long the discount or fix applies for is an important decision.

This graph shows the Bank of England Base Rates Since 1970.

It demonstrates the volatility in the base rate in the years preceding 1993 and should perhaps be taken into consideration when choosing whether to opt for a fixed or variable rate mortage.