First time buyers who are considering buying a flat, a house or a commercial property will need to find out about mortgages. Thanks to the credit crunch, the range of mortgage products available is not as wide as it was in the days of the housing boom, but mortgages can still be characterized into several basic types and varied in different ways.

One of the simplest variations is in the length of the mortgage term. If you are trying to make a big mortgage more affordable you might be able to lengthen the term to reduce your monthly bills. On the other hand, if you can afford it, you can save a lot of money in the long run by shortening your mortgage terma and paying more each month. Some types of mortgage offer flexible payments, allowing you to reduce your loan capital by making extra payments when you can afford it.

Getting your mortgage right can do a lot to improve your finances. Mortgages have several basic differences. Some require balloon payments at the beginning or end of the loan. Some have variable interest rates, which change along with the base rate of the economy. These are a good deal if interest rates stay the same or go down. Others have fixed interest rates, which can be a good option when interest rates are low when you lock your rate in, but then go up.

Another benefit of fixed rate loans is that, by making your monthly mortgage bill the same each month, they help to simplify the household budget.

Adjustable rate mortgages do change with interest rates. Sometimes they are capped with an upper limit to stop them increasing above a certain rate, and sometimes there is also a lower limit.

If you have savings, you might benefit from an offset mortgage, which allows you to offset your mortgage interest with a savings account. If you are on a tight budget, you might be tempted by low introductory rates, as long as you aren't locked in for too long afterwards. But with so many home loan and commercial loans on the market, you should be able to find a mortgage type to suit you.