Taking out a mortgage loan to buy a home is probably the largest amount of borrowing any of us are likely to undergo.

It may not feel like it but the relative ease of access (somewhat constrained post recession) and cheapness of mortgage loans is largely down to the fact that for the lender the security of the loan lies in the house bought with the money. That is, your home – and the lender has a right to it if you can’t or won’t pay the mortgage premiums.

Other forms of borrowing you are likely to look into need not mean risking your home as security. These are personal or unsecured loans. And credit cards are in effect a means of short term borrowing. It could be argued the latter two forms of borrowing are riskier for the lender and as a result you as the borrower will pay more for the facility.

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