The interest only and capital & interest are the main methods of repayment but the mortgage itself as a financial product will be a little more complicated than that as lenders structure there deals to be more competitive than others.The most common features of these deals which could apply to either method of repayment.

FIXED RATE:

A fixed rate mortgage is when the mortgage payments will be a fixed amount in percentage terms for a set amount of time.The are usually fixed for around 2 years or so and designed to lure borrowers into what is usually an attractive proposition in the short term.A typical fixed rate deal will be something like 5.8%APR interest only for 24 Months , regardless of any base rate changes in the duration of those 24 months.After 24 months they will revert to a variable rate mortgage.

VARIABLE RATE:

A variable rate mortgage is a mortgage that is adjusted by the lender monthly.They may follow changes in the base rate but ultimately the lender decides wether to pass on any savings.