HOME TRUTHS

Fixed or capped?

I am coming to the end of a mortgage deal and am looking at a number of options from my current lender. What is the difference between a fixed and a capped-rate mortgage ?

J Reid, Worcestershire

A fixed rate means the interest rate on the mortgage is fixed at the same level for a set time. The main advantage is that you know your repayments will not be affected by changes to the base rate.

With a cap, the interest rate will go up or down in line with the lender's variable rate. However, there is a maximum (capped) interest rate, so you know your payments cannot go above a set level. Your monthly payments will also drop should your lender's interest rate fall.

Mortgage extension

I am looking at rearranging my finances and would like to know if it is possible to pay back my mortgage over a longer term?

T Walden, Coventry

You will need to send a letter to your lender to be able to change the term of your mortgage. Most lenders will also want a guarantee that you can repay the loan by the time you reach 65, though there are some lenders that may extend this if you can provide evidence of an adequate income or pension.

Remember that with a capital and interest mortgage, changing the term will affect your payments. For an interest-only loan, your monthly payments will not change, but you need to ensure that your lump-sum repayment coincides with the new scheduled repayment date.

The walls have leaks

Our neighbours' property had a water leak while they were on holiday. Not only did it flood their house, it badly damaged our living room. Is it possible for us to claim damages, and if so, who from?

Mr and Mrs Downing, Dorset

You will be able to claim for the damages to your property. Your neighbours will claim for the damage to their property through their insurance company, and you will need to claim through yours. Your insurer will then contact the neighbours' firm and put in a counter claim on your behalf for the funds you are claiming for repair work.

At your service

I have read that different mortgage lenders offer different types of advice. What does this mean?

H Sharpe, Liverpool

The Council of Mortgage Lenders highlights three levels of service that are available from lenders. The first offers information on a single mortgage product only - for example, where a person has already decided what sort of loan to take out. The next level gives information on the different types of mortgages available. The final level is where the lender offers advice and makes a recommendation on which mortgage is most suitable for the customer. Ask for a copy of the Mortgage Code, which outlines the standard of service you should get. You can complain if you aren't happy.

q George Wise is managing director of NatWest UK Mortgage Services.

q Send your queries on practical property issues to: Home Truths, 'Independent on Sunday', 1 Canada Square, Canary Wharf, London E14 5DL; fax 0171 293 2043; e- mail sundayproperty@independent.co.uk.