The research seks to better understand the choice of mortgage design by households in the United Kingdom. Family Expenditures Survey data is used to test the various hypotheses on the determinants of the choice between an endowment and a repayment mortgage. A bivariate probit model with sample selection is estimated to detect any likely selectivity bias arising out of tenure choice. The theoretical modelling reflects the behaviour of liquidity constrained households comparing comparative periodic mortgage costs and households concerned with the oppurtunity cost of equity in a property. Actual choices appear to reflect the impact of nominal interest rates, income and cash flow considerations. There is little direct evidence that the choice of mortgage repayment vehicle is motivated by portfolio design. There is some tentative evidence of supply side pressure on endowment mortgage take up.