On traditional fixed-rate mortgages, borrowers face another decision, about points.

Both are usually referred to as second mortgages, because they are secured against the value of the property, just like a traditional mortgage.

The traditional 30-year mortgage with guaranteed payments is increasingly a loan of the past.

A common "error" is to include the capital repayment element of a traditional mortgage as an expense.

In many traditional mortgages, home buyers pay 20 percent down to avoid buying personal mortgage insurance.

Rates on traditional fixed-rate mortgages have shot up over the last year.

Sometimes, an owner finances all or part of a down payment, and the buyer takes out a traditional mortgage for the remainder.

"What you're really getting is an interest-only payment schedule combined with a traditional mortgage," he said.

Such loans typically offer a lower rate than a traditional mortgage.

But what they did not know was that the traditional 20-percent-down mortgage may no longer be the mortgage of choice.