MORTGAGES

You borrow a lump sum over a fixed period of time (usually 25 years but can be shorter). You pay the interest and some of the capital on a monthly basis to the lender.

ADVANTAGES: Some flexibility with repayments. The only way you can be 100% certain the loan will be repaid.

DISADVANTAGES: Can be slightly more expensive than endowment mortgages. Only a small amount of capital is paid off in the early years.