When you decide to purchase a home and to apply for a mortgage advance you will have to make a number of decisions. One of the key choices you will have to make is whether you want to have a fixed or variable rate mortgage.

Fixed rate and variable rate mortgages both have their benefits and their drawbacks. For example, a fixed rate mortgage guarantees that your monthly mortgage payment will be the same for the term of the `fix` usually somewhere between two and five years. Fixed rate mortgages makes budgeting simple - you always know what you will have to pay each month.

A variable rate mortgage is different from a fixed rate mortgage in that the interest rate applied to your mortgage may change during its life. As a result, your monthly payments will change as well. This type of loan makes budgeting a bit more difficult since your payments may not be the same every month. On the other hand, depending on market fluctuations, you might save money on interest payments if you choose this sort of mortgage. If interest rates are rising you would find yourself paying more instead, if they are falling you could be paying less.

There are variations of this theme; for example you could fix your rate at a set level above the Bank of England rate or some other rate (known as a tracker mortgage) rather than depend on the lender's decision about the rate, the traditional variable rate.

The decision as to which to choose will be influenced by a number of factors: whether you have a fixed budget for the foreseeable future; do you prefer to know exactly how much you will pay for a set period; are you prepared to take a risk that may result in lower monthly payments if interest rates fall.

Every individual and their circumstances is different so it pays to think carefully or take expert advice before making your decision