The more overextended you are with debt, the lower your credit score will generally be. Interest rates paid on savings accounts is invariably less than is charged for debts owed.

It therefore makes sense to draw down your savings to clear as much of your debt as you can. In doing so, you will also increase your credit score making any future credit debt you take on cheaper to service.

A fixed rate mortgage involves you agreeing with your lender to pay a fixed interest rate on your mortgage loan for a fixed period of time, which is normally 2, 3, 5 or 10 years.

Although the interest rate may initially be slightly higher than what you are quoted for a variable rate mortgage, you gain from the security of knowing exactly what you'll be paying out each month. This is more likely to suit the lower risk profile of a first time buyer because they can budget for the sum and, as long as there aren't any unforeseen drastic occurrences such as unemployment, they can be assured that they'll be able to make their mortgage repayments.

With a fixed rate mortgage, when the fixed term finishes, the mortgage is converted to a variable rate mortgage which varies with the lender's standard variable rate (SVR). At this point, a mortgagor can either opt to stay on the SVR mortgage or organise a new fixed rate. If they leave before the fixed term has elapsed, they face having to pay a very large early repayment charge.