As mortgage approvals start to rise, perhaps you are thinking of taking the plunge and buying a property. Read our quick guide to understanding mortgage terminology.

With mortgages, you must pay off the interest on the loan each month, but you have a few choices as for the loan itself:

With a repayment mortgage you pay off the loan gradually - part of the cash you pay each month covers interest on the loan, and the rest pays off a portion of the capital sum you borrowed.

With an interest-only mortgage, you will have the amount you borrowed outstanding for the whole term, as you only pay off the interest each month. With this type of mortgage is that at the end of the term you'll need a lump sum to pay off the capital.

• Different types of interest rates

Differentiating by the way interest is calculated, the most popular mortgages tend to be variable rate, fixed rate, discount and tracker, capped rate, and offset mortgages:

Variable rate mortgages are up to your bank or mortgage provider. They set a rate on their own, usually heavily influenced by the Bank of England's base rate, and raise, lower, or freeze this rate as they choose.

Fixed rate mortgages are fixed for a set time, so you know exactly what to expect. This is nice to know when you lender's variable rate rises above your fixed rate, but if it falls, your mortgage provider is laughing all the way to the bank. Usually, there is a heft penalty applicable if you want to exit.

Discount mortgages offer a percentage discount off the lender’s standard variable rate, which means your monthly payments move up and down with the lender's normal variable rate, but you enjoy a discount over a set time. The trick with these is getting a discount mortgage that doesn't lock you in after the discount ends, as you'll want to re-mortgage as soon as it does.

Tracker mortgages follow the interest rate of an independent body, usually the base rate set by the Bank of England: when the base rate changes, the tracker mortgage changes automatically. Interest rates on tracker mortgages are usually set at the base rate plus or minus anything between 0.5% and 2%.

Capped rate mortgages ensure there is a ceiling to the interest rate you will pay over a given period of time. As with fixed rate mortgages, if your lender's variable rate rises above the capped rate, you benefit, but unlike as with fixed rate mortgages, if it falls below the capped rate, you pay what everyone else pays. The downside of capped rate mortgages is that they tend to have higher interest rates than fixed rate mortgages - the price of enjoying a fixed upper limit on your mortgage payments.

Offset mortgages allow you to contribute your savings towards your mortgage, without losing access to the funds themselves. The more you have in your savings account, the less interest you have to pay on your mortgage, which helps you repay your mortgage faster and more cheaply. Offset mortgages tend to be best for people with volatile incomes or significant savings and with discipline over finances..

Most lenders reserve their best deals for new customers, which means you can often get a better deal by re-mortgaging every few years. While re-mortgaging can take some time, with rates for new mortgages up to two percentage points lower than the typical standard variable rate, re-mortgaging could save you hundreds of pounds a year.

Also always look at the Annual Percentage Rate (APR - also known as the overall cost for comparison), how often interest is calculated (daily is better than monthly and monthly is better than annually), how long any early repayment charges will keep you locked in for, and if you can overpay without incurring penalties.