Credit reference agencies tend to view people who take up all credit available to them as overextended financially.

People who are overextended financially are statistically more likely to default on credit repayments or to make payments late – it all translates into a lower credit score, which will make future credit applications less assured of being granted and any credit granted more expensive.

Mortgages can be examined in terms of whether they share one or more of the following characteristics (although the first two are 'either/or' choices):

Residential mortgage applicants can only take out repayment mortgages whereas non-residential clients can also opt to take out interest-only mortgages.

Interest rates are either fixed for a period or track a particular rate, which always involves taking into account movements in the Bank of England's base rate. Offset mortgages look to offset interest made on savings against interest owed on a mortgage and thus make repayments cheaper.

Help to Buy mortgages are specific to the Government's Help to Buy scheme, in which you buy a New Build home from a Help to Buy agent, using an equity loan of up to 20% (40% for Help to Buy London) from the Government and a reduced (minimum 5%) deposit. They are smaller than normal in terms of loan to value ratios because they only have to cover up to 75% of the purchase price (up to 55% for Help to Buy London).

Helper mortgages describe mortgages where a mortgage applicant has the help of an associate (normally a close family member) in buying a home. The associate provides security that the loan will be paid back either by putting up their own home as collateral or by putting money into an account which the lender controls, which may not be able to touched for a number of years, or by devoting interest earned on a savings accounts to bring down the interest on the mortgage loan, making the mortgage cheaper to repay.