Weekend Money: Take advantage of lower interest rates on mortgages

Whatever you are borrowing for, you will be much better off if you pay as low an interest rate as possible.

The lowest rates are generally on mortgages. And you can often take out or extend a mortgage to buy something other than a house.

By doing this, you might well pay only one third of the interest you would on a credit card or hire purchase.

One problem, though, is that mortgages run for a much longer term than other loans. And the longer the pay-back period, the more total interest you will pay.

It is important to pay back the extra mortgage in just a few years.

There are also non-financial reasons to borrow.

The value of education should be measured in more than just the extra dollars you will earn.

Or it might be important to you psychologically to run a small business, even if it does not generate enough income to justify the start-up loan.

That is fine as long as you are aware that your borrowing might not be financially sound, and you can afford to do it anyway.

Sometimes emergencies arise. You might need a loan to travel when a family member is sick or has died.

The trouble is some lenders will take advantage of this situation, charging unreasonably high interest rates. Try to avoid this by putting aside some savings for emergencies.