Other features

As well as having one of the above interest rate features, mortgages often offer a number of other options, which can help you make the decision on what is best for you and your circumstances.

A flexible mortgage allows you to vary your monthly repayments. Depending on the flexibility of the particular mortgage, you can, without charge:

• Make over or underpayments each month (e.g. you know you will have high expenses in June, so choose to underpay that month).
• Make a lump sum repayment (e.g. if you receive a bonus and decide to put it all into the mortgage).
• Take a payment 'holiday' (you might want to pay for a car or a holiday and need to take a break from your mortgage payments for a while).

The flexibility is conditional - usually you have to follow (or exceed) a predetermined repayment schedule.

TOP TIP: Look out for a mortgage which may not officially be "flexible" but still allows the ability to make overpayments.

A cashback mortgage pays out an upfront lump sum when the mortgage is taken out. This sum can then by used to pay, for example, for home furnishings or pay off a credit card debt.

Pros
You get cash just when you need it, at a relatively competitive rate compared to most credit cards or other short-term loans.

Cons
If you do take out a cashback mortgage you will often find that the interest rate is the lender's standard variable rate - the disadvantage of the cashback is the lack of flexibility or competitiveness on the interest rate.

A droplock mortgage is a discount or tracker mortgage, which has an option to switch to a fixed rate at any point within the initial discount or tracker period without paying any early repayment charges.

This provides an ideal way to benefit from base rates when they're low, with the option to switch easily to the protection of a fixed rate should interest rates look set to rise significantly.

Like current account mortgages, offset products allow you to offset the balance of your mortgage against any funds in a savings and/or current account held with the same lender, and pay interest (calculated on a daily basis) on the net balance between the accounts.

John Charcol is not authorised to offer investment advice.  We recommend you seek professional advice with regard to these topics if you believe they may affect you.