Representative Example: £150,000 mortgage over 25 years initially at 2.29% fixed for 122 months reverting to 4.24% variable for term. 122 monthly payments of £657.17 and 178 monthly payments of £751.01. Total amount payable £214,899.52 includes loan amount, interest of £63,855, valuation fees of £0 and product fees of £995. The overall cost for comparison is 3.0% 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.
Mortgage comparison can seem like a daunting task – there are thousands of mortgages available, different acronyms to suss out, different types of rate and many rules and restrictions to get your head around. Hopefully, this guide will help you to understand everything you need to know about comparing mortgage rates so that you can the best mortgage deal for you on your home.
The best buy mortgages you see in our chart are the best mortgage deals currently on the market. To ensure you get a comprehensive insight into the deals on offer we include mortgages from all UK providers including high street banks, building societies and challenger banks. Our best buy mortgages include deals for all types of mortgages from fixed to variable, as well as from first-time buyers to remortgages.
Our best buy mortgage is a completely impartial comparison chart that provides you with the best mortgage deals on the market today. Mortgage providers cannot pay us to get to the top of our best buy mortgage chart, instead they have to offer the best deals on the market. We don’t just look at rates when deciding on our best deals but instead look at number of different factors. Our mortgage chart is split into sections so that you can clearly see the best deals for different types of mortgages.
When looking at the mortgage comparison chart you may notice that some mortgages are not listed or are listed lower down the chart even if they offer a higher rate. The reason for this is because we take in many factors when deciding on who should be at the top of our Best Buy charts including looking at restrictions on who can get the mortgage, which can impact where the mortgage charts.
When choosing the right mortgage it is important to first understand the different types of mortgages available. This will help you figure out what sort of mortgage will be suitable for you and your circumstances.
The table above gives a very broad outline of the different rate types and who they may be good for.
A fixed rate mortgage typically comes with an initial deal period, usually two and five years (but can be longer; there are an increasing number of 10-year fixed rate mortgage deals available). The main advantage of this initial period is that you’ll know exactly what your monthly mortgage repayments will be for however long it lasts. This will enable you to plan your budget effectively, as you’ll know exactly how much you need to ring-fence for you mortgage repayments each month.
It’s worth pointing out that fixed rate mortgages tend to come with higher rates than their variable counterparts, but this is often a small price to pay for the security that fixed mortgage interest rates can offer.
Variable and tracker rate mortgages typically have lower rates than their fixed rate counterparts, at least at the point you take the mortgage out, and can therefore be cheaper overall, but they come with far less security as the rates aren’t guaranteed.
As variable mortgage rates could change at any time, often depending on the Bank of England base rate (or other wider economic conditions), the amount you pay each month may vary. If you need to know the exact amount you’ll be required to pay back each month, then a variable rate mortgage is not for you. If, however, you believe that rates won’t go up, but are prepared for if they do, then a variable mortgage might be just right for you.
So long as you bear in mind that your mortgage rate may increase, and have enough wiggle room in your budget to accommodate fluctuations in your monthly mortgage repayments, then a variable rate mortgage may be a good option for you.
Note: we’re referring here to the variable rate mortgages that can be found in our Best Buys, not those offering the lender’s Standard Variable Rate (SVR). SVRs are usually far higher than anything else on the market and are typically what a borrower reverts to once an initial fixed or discounted rate period ends, which is why remortgaging should always be considered at the end of such a period.
Many mortgage lenders have an offset option as part of their range; you can find the available offset mortgages by using our filtering accordingly. This type of mortgage might be an option for those with a decent savings pot who are unimpressed by the current rates of savings interest on offer.
With an offset mortgage, you’re able to use your savings to reduce your mortgage payments by ‘offsetting’ it against your mortgage, thereby reducing the balance you pay interest on. You don’t lose your savings in the process, as you would if you were to overpay a mortgage or put down a larger deposit, but instead agree to put your funds aside and forgo any interest you might have otherwise earned on the money.
For example, if you had a £125,000 mortgage balance and £25,000 in a linked savings account, your monthly mortgage interest would be calculated on £100,000 rather than the full balance, resulting in lower repayments. If you then switch to a different mortgage, you can get the £25,000 back to put in a savings pot that does pay out savings interest.
Depending on the state of the savings market, and the deal you can get on an offset mortgage, this might reduce your repayments by a greater amount than you would otherwise have been able to earn in savings interest. Always compare mortgage rates across the whole market before making a decision as rates may be less competitive in this sector due to its lower profile.
Loan-to-value (LTV) refers to the ratio between the amount you borrow (the loan) and the value of the property you are mortgaging (or remortgaging). LTV is expressed as a percentage. For example, if you have a mortgage of £150,000 on a house that’s worth £200,000, you have a loan-to-value of 75% - with £50,000 as equity.
The LTV you have will typically determine the rate you’re able to access – generally, the lower the LTV, the lower the rate, so it’s worth saving as big a deposit as possible, particularly if you’re a first-time buyer.
The deposit you have to put down, or equity you already have in your home, plays a crucial part in the best mortgage deals 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 in our loan-to-value (LTV) guide.
If you’re planning on moving home, you will likely want to get a new mortgage on your new property (some mortgages do allow you to port your deal to a new property, so it may be worth considering that as an option as well).
Assuming you’re looking for a new mortgage, you will want to consider the type of rate you’re willing to pay (see above for more details) and you LTV ratio. Once you know what you want and what is available to you, you can start the application process.
If you have reached the end of your mortgage term or will do soon, then you may want to avoid paying your lender’s SVR. This is where remortgaging comes in.
If you look at the best remortgaging deals, you’ll find that they usually pay better rates than an SVR, regardless of whether you are after a fixed or a variable remortgage rate.
Note that if you’re looking to remortgage before the end of your term, you’ll first want to check the terms of your current mortgage. That’s because your current mortgage provider may charge an early repayment charge (ERC) before they will allow you to change to a different deal. However, this may be worth it if you can significantly reduce your mortgage repayments in the process.
Don’t forget to check with your own provider when considering remortgage rates, as they may be inclined to make the process easier for you if you stay with them, and may even offer lower rates or fees.
It’s difficult to get a big enough deposit together to take that first step on the housing ladder, especially as house prices continue to rise, which is where first-time buyer mortgages come in. These deals are typically offered at LTVs of 90-95% to help those who only have enough saved up for a 5% or 10% deposit.
As providers are taking on extra risk by lending at such a high LTV, the rates on offer cannot be considered the best mortgage rates available, but they can be a lifesaver for those looking to buy their first property. Just bear in mind that you’ll be facing higher repayments than if you could cobble together a bigger deposit – if you can, it may be worth waiting until you can secure a lower LTV. Use our mortgage search tool to compare the different rates.
Buy-to-let (BTL) mortgages are a specialist type of mortgage for those who are or want to be landlords. They have much stricter lending criteria and require even more upfront research than a normal mortgage would warrant, which is why it’s best to seek independent financial advice before choosing to become a landlord. BTL mortgages have their own separate section on this website, with plenty more specific information in our guides.
When deciding how to pay for your mortgage, you generally have one of two options – you can apply for an interest-only deal or opt for full repayment.
Repayment mortgages are designed so that, by the end of the mortgage term – which can range from 25-35 years and beyond – you’ll have paid off the full balance plus interest, and will have nothing further to pay. Your repayments will be calculated accordingly, and while they’ll be higher than if you had an interest-only deal, you can be confident that you’ll have paid off everything by the end of the term.
You may even be able to shorten your mortgage term if you make overpayments, which will also reduce the amount of interest you pay. Remember, too, that when you pay off more capital you’ll be able to move down the LTV scale, enabling you to secure lower rates, and therefore lower repayments, should you decide to remortgage onto a different product.
With this type of mortgage, your repayments are generally lower, but only because you’re not actually repaying the balance of the loan or increasing your equity (though if your property increases in value over this time, then your equity will increase as well; conversely if your property loses value you could find yourself in a sticky situation).
You will only be repaying the interest on the mortgage, which means that at the end of the term, you’ll still be left with the full balance of your initial loan. You will have to come up with a lump sum to pay off your outstanding mortgage debt.
Many people once banked on rising house prices to help them do that – they were hoping to sell their home at a higher price than when they first bought it, which would have theoretically covered their mortgage. However, the financial crisis and rapidly falling house prices meant that often didn’t happen. Similarly, others banked on pensions, endowment funds or savings, but poor investment returns left many far short of the sum needed. This is why such deals are now less common – they’re more often used in the buy-to-let sector, with full repayment the preferred choice for residential mortgages.
Now that you have a general idea of the different types of mortgages available, it’s time to start thinking about how they apply to your specific situation, and which one would be the most appropriate for you. For some of these mortgage types, it’s easy to see which one would be best. If you’re a first-time buyer with a small deposit, a first-time mortgage deal will probably be your best (and only) option. If you have a large savings pot that isn’t gaining you as much interest as you’d like, an offset mortgage might be for you.
A less obvious choice is that between a fixed and a variable rate mortgage. This choice may come down to personal preference – whether you’d prefer to know your exact monthly repayments for the foreseeable future, or are happy with some degree of uncertainty in exchange for the possibility of a lower rate.
However, don’t forget to compare mortgage rates across the board. Sometimes, it may be that fixed mortgage rates are particularly high, in which case it would be better to opt for a variable rate deal which may even decrease. At other times, such as when there is a lot of uncertainty in the market, it may be better to fix your mortgage for as long as possible, to ride out any storms and avoid a variable rate which may increase by more than you’re comfortable paying.
Aside from scouring the Best Buys for the top rates and comparing the best fixed and variable mortgages, borrowers may also want to look at who is providing the best mortgage deals. High street providers may be the ones with the biggest marketing budgets, and therefore generally the ones that draw the eye, but they don’t necessarily offer the best rate mortgages. Sometimes, a challenger is a lot more eager to sign people up, and will offer better deals as a result.
Also remember that the cheapest mortgage rate isn’t always the best one for you. To make a fully informed decision, look not just at the rate and the term, but also how much it will cost upfront in mortgage fees, whether or not the lender will allow you to remortgage if rates become lower in the future, and anything else that you find important. Be on the lookout for incentives, too, but don’t be swayed by them – the true cost of the mortgage, including the rate and fee, is what counts.