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Unless you win the lottery or inherit a large amount of money, the only way you will be able to own your own home is to take out a mortgage.

Your mortgage, probably the cheapest money you will ever borrow, is used to buy a property, usually your new home, and is secured against the property you are buying. There are two types of mortgage: an endowment mortgage and a repayment mortgage. Endowment mortgages have been largely discredited after some anomalies in their use in the 1980s. Most people now will have a repayment mortgage where money is lent to a borrower to buy their new home and the money is paid back, plus interest, at monthly intervals over a long period of time, usually twenty or twenty-five years.

Traditionally, people borrowed money from a building society to buy a home. A building society was an organisation owned by its member: people who had a mortgage with them or who used them to save money. A few years ago the law was changed to allow building societies to sell shares in themselves, thus converting from being owned by members to being owned by shareholders and in effect becoming banks. The former members of building societies received the money from the selling of shares and so received an unexpected wind fall.

There are not many traditional building societies left these days so mortgages are as likely to be sold by a traditional bank as from a former building society.