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
Our mortgage calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.
A mortgage is the name given to a loan that is used to buy a property or piece of land where the loan is secured against the property being purchased. Mortgages are typically long-term loans with repayments spread over 25 years.
The first thing to compare is the different types of mortgage available. This will help you figure out what sort of mortgage will be suitable for you and your circumstances.
Fixed rate mortgages
Variable and tracker rate mortgages
You want to know exactly how much your monthly mortgage repayments will be
You believe mortgage rates will go down in the foreseeable future
You have a decent savings pot you are happy to leave untouched for a period
Not so good if:
You think mortgage rates might go down, and are worried you’ll end up paying over-the-odds on a fixed rate deal
You’re on a tight budget and need to know exactly how much your mortgage repayments will cost you every month
You may have to dip into your savings or want to earn savings interest
A fixed rate mortgage typically comes with an initial deal period, usually between 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 your 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 comparison charts, 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 mortgage search and 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 deciding, 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 deposit you must 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 comparison chart 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.
Mortgages options vary depending on what are looking to do.
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 your 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 an existing fixed or discounted variable 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 remortgage 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% to 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.
You can apply for any of the above mortgages as a couple or group of friends (although not all providers will allow more than two people to apply together). If you do decide to do this, bear in mind that you will share the responsibility of making repayments, which means that if your mortgage partner becomes unable or unwilling to pay, you'll be liable.
While risky, there are certain advantages to getting a joint mortgage. You'll be able to get a bigger deposit together, you'll likely be able to borrow more as both of your incomes etc. will be looked at, and you'll split the repayments, making everything a bit more affordable.
If you're interested in this route to home ownership, make sure you both have a good credit rating before you apply, and agree on what kind of ownership agreement you will have. You may want to consult an independent expert before leaping in, especially if you are not otherwise legally tied to the other person (by marriage or civil partnership, for instance).
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.
Our guide includes the information you need to increase your chances of getting a mortgage.
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.
Ideally, you should aim to set your mortgage term for as short a period as possible, as that way you won’t pay as much interest – although it does mean higher monthly payments. Conversely, a longer-term mortgage will reduce the monthly payments, but means you pay more overall, as interest will be charged for a longer period.
It’s important to weigh up your options carefully, as your decision will often be based on your current financial situation. However, it could be possible to change your term when it’s time to remortgage, so even if you want to keep your repayments low for the foreseeable future, you could opt for a shorter term when your financial situation changes. Remember, too, that if you find you can pay more, you may be able to make overpayments that can reduce your mortgage term.
It’s important to consider initial terms, too. Most fixed (and even some tracker) rates apply for an initial period, typically two, three or five years, but could be longer. At the end of this initial term, you'll need to find another mortgage to make your repayments as low as possible to avoid reverting onto your lender’s SVR.
Shorter introductory mortgage rates might be attractive, but remember that the shorter your initial term, the more times you'll need to remortgage, potentially paying mortgage fees each time. Longer-term fixed rates offer the chance to guarantee your repayments for longer, but there’s also the chance that, if rates go down, you could end up paying over the odds for your mortgage. It all comes down to which possibility works best for you.
Our mortgage calculator helps you to see how much your mortgage might cost you each month.
Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.
Read our How much can I borrow for a mortgage guide to find out more about what can impact your potential sum of borrowing.
There are several reasons you might consider using a mortgage broker or mortgage adviser, not least because it can transition the stress of finding the best mortgage onto a third party. However, the most compelling reasons to use a mortgage broker are that you have more legal protection if you are mis-sold a mortgage, and your broker will most likely be more qualified to find a mortgage than you are.
Then there’s the fact that an independent broker has a responsibility to find the best mortgages on the market for your personal circumstances, and they’ll often have access to deals that you won’t be able to find on your own. They’ll offer additional support, too; to learn more about mortgage brokers, read our mortgage broker guide, or contact an independent adviser.
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 that 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 that may increase by more than you’re comfortable paying.
Aside from scouring the best rate tables 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 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.
Once you’ve figured out what kind of mortgage you want, it can be an easy process of looking at our best rate tables to see the current mortgage rates available and deciding which deal best fits your requirements. But there’s more to it than simply applying.
A vital aspect of applying for a mortgage, which people can choose to ignore at their own peril, is a credit rating. As part of the mortgage application process, your chosen lender will run a credit check on you and whoever else you may be buying the property with. If your credit score isn’t good enough, not only will you not get the mortgage, but your credit rating will also be lowered further, potentially making it harder to get a mortgage from another provider.
So, while you may be solely focused on getting that deposit together, don’t forget to keep an eye on your credit rating – and do whatever you can to make sure it is as good as it can be.
Don’t forget about other expenses, either, including moving costs, stamp duty, and of course upfront mortgage and valuation fees. If you click on the details link of any top mortgage deal, you will see not only what arrangement fee you will have to pay for that mortgage, but you may also find some extra incentives that can offset any upfront costs, such as cashback, free legal fees and a free valuation.
Stamp duty land tax, to give it the full name, is a tax paid to the Government when land or property is bought or transferred in the UK. Our stamp duty calculator shows you how much you can expect to pay on your next property purchase in England or Northern Ireland.
It is important to do a thorough valuation of any property you are looking to purchase, to make sure that there are no hidden problems that can cause you a major headache later. For instance, a house may seem spick and span, but if the toilet outflow doesn’t connect to the sewer pipes, it's nothing more than an odd accessory, and fixing these kinds of problems can cost you a lot of money.
Again, it’s all about paying attention to the details, not just of the actual property you are looking at, but also of the mortgage you are interested in. You may have found the cheapest mortgage rates, but have you thought about how you will manage the arrangement fee? Does it offer some degree of flexibility should your plans change?
There is no such thing as the ultimate good deal; everyone’s circumstances are unique. The best thing you can do is to compare the mortgage market, using our mortgage search tool that allows you to put in your specific search criteria, and see if the best rate mortgage deals match your requirements. Then make sure you’re as prepared for applying to a lender as you possibly can be. This may seem like a lot of hard work, but it could save you a lot of money over the long run!
Do your own research, using our mortgage comparison calculator, our mortgage guides, and any other information you can find, to make sure you are fully prepared for taking on a mortgage. Furthermore, don’t hesitate to contact an independent mortgage adviser to get the very best deal for your own personal circumstances. These things can make it more likely for your application to be accepted by a mortgage provider, with the interest rate that you are after. Then you will just have to worry about what colour to paint the walls!
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.
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Our stamp duty calculator shows you how much you can expect to pay on your next property purchase in England or Northern Ireland.
Our stamp duty calculator shows you how much you can expect to pay on your next property purchase in England or Northern Ireland.
How to handle your mortgage during a divorce or separation.
How to handle your mortgage during a divorce or separation.
Our guide to help with those first steps to becoming a buy to let landlord.
A mortgage broker specialises in finding mortgage lenders who will meet your needs for a mortgage. They do this by providing you with advice and recommending the mortgages most suitable for you. They will then manage completing your mortgage application.
Should I use a mortgage broker?