Representative Example: £150,000 mortgage over 25 years initially at 1.69% fixed for 38 months reverting to 4.79% variable for 46 months and 4.54% variable for term. 38 monthly payments of £613.39, 46 monthly payments of £827.54 and 216 monthly payments of £811.63. Total amount payable £237,996.74 includes loan amount, interest of £86,688, valuation fees of £214 and product fees of £995. The overall cost for comparison is 4.0% APRC representative.
Our team of experts have chosen those mortgages they believe to be Best Buys. A selection of those, for which we have arranged links are shown above, whilst products shown with a yellow background are sponsored products.
A sponsored product is a product that has not met the criteria to appear in the best buy tables at that time, but which we may receive a payment to promote below these charts. They are listed with the products we have the best commercial deal with shown first.
Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing.
Before you start your mortgage comparison, make sure you're certain of what you're looking for - that way you won't get lost looking for the best mortgage deals out there.
Remember that the mortgage you choose is going to have an impact on your monthly finances for a number of years, so it's important to shop around for the best deals.
Make sure you've considered the following before starting your mortgage search.
When you compare mortgages, there are two main types of mortgage interest rate to keep in mind:
Fixed rate mortgages can be great if you'd rather know what you'll be paying, or if you're on a tight budget and can't afford for your payment to go up. Fixed rate mortgages often have the lowest mortgage rates. Learn more about fixed rate mortgages with our fixed rate mortgage guide.
Variable rate mortgages may be for you if you don't mind taking the chance of your payment going up. However, if finding the lowest mortgage rate is important to you, you could end up paying much less in interest. Before you compare variable rate mortgages, be sure to read Standard Variable Rate Mortgages, Tracker Mortgages or Discounted Mortgages mortgage guides.
Only consider a variable rate mortgage if you can afford a payment that's quite a bit higher than you are quoted at the outset. Variable rates can go up as well as down - your payment could increase by hundreds of pounds later on, so make sure you can cover this.
Most mortgages are set up on a repayment basis which means that you repay the loan and the interest as you go along. This guarantees that the loan is repaid at the end of the mortgage term. With an interest only mortgage you just pay the interest each month but none of the actual loan. So you need a separate method to save up enough to be able to repay the whole loan at the end.
You should aim to set your mortgage term for as short a period as possible as you will not pay as much interest. However, a shorter term does mean higher monthly payments (assuming you have a repayment mortgage). A longer term mortgage will reduce the monthly payments, but mean you pay more overall.
Most fixed or discounted variable rate apply for an initial period. This is typically 2,3 or 5 years, but could be longer. When considering the term you should also think about how long you would like this initial deal period to run for. At the end of this initial term you'll need to find another mortgage to make your repayments as low as possible. This is known as 'remortgaging'. Shorter introductory mortgage rates might be attractive, but remember that your payments will probably increase when the initial deal ends. The shorter your initial term, the more times you'll need to remortgage, potentially paying mortgage fees each time.
Longer term fixed rates have their pitfalls as well as, if rates go down, you could end up paying over the odds for your mortgage, while others enjoy lower mortgage rates. Although this is unlikely in the current low interest environment.
The deposit you have to put down (or equity you already have in your home) plays a crucial part in the best mortgage rates you can get:
The higher the mortgage in relation to the value (or purchase price) of your home (LTV), the greater the risk to the mortgage lender. The greater the risk to the mortgage lender, the higher the rate you'll pay.
You'll see that the mortgages in our Best Buy tables all state a maximum LTV - this is the highest possible proportion of borrowing against property price or value that you can have on that mortgage. You can learn more about loan-to-value with our Loan-to-value (LTV) guide.
A mortgage that allows you to overpay, underpay, take payment breaks and/or borrow back money is often referred to as a flexible mortgage.
If you think you'll want to overpay, or to have the option to pay less or suspend your payments later (during a planned sabbatical for instance), you'll need to make sure your mortgage will allow this.
Another thing to consider, if you're thinking of moving in the next few years, is a portable mortgage that allows you to take your borrowing from your current home to the next.
A portable mortgage means that, because you don't have to finish one mortgage and start another one, you can avoid having to pay both an Early Repayment Charge on one mortgage and set up fees on a new one (although there will normally be a porting fee, this will be a lot less that the fees you would have to pay if taking out a new mortgage).
There are several reasons you might consider using a mortgage broker or mortgage advisor - not least because it can transition the stress of finding the best mortgage onto a third party. The most compelling reasons to use a mortgage broker are; you have more legal protection if you are missold a mortgage, your broker will most likely be more qualified to find a mortgage than you are, and finall, a broker has a responsibility to find the best mortgage deals on the market. To learn more about mortgage brokers, read our mortgage broker guide.
As you can see, mortgages can be very complicated and we recommend that you use an independent mortgage adviser to get the very best deal for your own personal circumstances.