The biggest purchase most of us will ever make is a house. In order to do this the great majority of people have to take out a mortgage. What many people fail to realise is that a mortgage is basically a debt on which you are charged interest and the sooner it can be repaid the better, as the total amount you end up paying in credit charges can be very high.

For example, taking a £50,000 loan on a Capital Repayment basis over 25 years, could involve actually paying out a staggering £119,049 in total based on a variable interest rate of 8.2 per cent (8.90 per cent APR).

If your mortgage is such that your disposable income isn't fully taken up paying the monthly amounts, then one very sensible option is to consider paying extra each month in order to reduce the loan.

The normal repayment method based on above figures would involve a net monthly outlay of £372.

However, if you were able to afford to pay an extra £100 a month, it means that your mortgage would be paid off ten years and four months earlier which in turn can save you over £30,000 in interest charges!

Remember there are plenty of types of mortgage and you should get independent financial advice to make sure you end up with something that suits your needs.

For a free factsheet entitled Finding the Right Mortgage readers can call 01484 860123.

Alan Mills is an independent financial adviser with A. J. Mills Independent Financial Advisers, a member of DBS Financial Management PLC, which is regulated by the Personal Investment Authority. Not all contracts of PHI are regulated by the PIA. Answers given are for general guidance only and specific advice should be taken before acting on any of the suggestions made. All information is based on our understanding of current tax practices which are subject to change. The value of shares and investments can go down as well as up.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.