The cheapest fixed rate mortgage is the one with the lowest interest rate and lowest (or no) fee. To find the cheapest option for you, the Best Rate tables are a great place to start. When comparing mortgages, there are a few things to pay attention to. First and foremost, there’s the rate. This will be determined mainly by the value of the property you're looking at and the size of your deposit. Typically, the more money you can put down for a deposit the better your mortgage rate will be, since you present less of a risk to the lender. As such, you may find that you're better off saving a bit more to get a larger deposit; have a look at different LTV mortgage deals to see what you could gain by saving a little extra or overpaying your current mortgage.
It’s not all about the fixed mortgage rates, however. Fees are another important consideration when choosing a fixed rate deal. Mortgages with particularly low rates may look attractive, but some of these come with expensive arrangement fees, which may undo any benefit you would enjoy from the lower rate.
As always, it’s beneficial to read the small print on the terms of your mortgage. Sit down and calculate how much you will be charged at the beginning and end of your mortgage. It's also worth finding out how much you will be charged if you need to cancel. Even if you never need to, it's better to have a backup plan.
Work out the full cost of your mortgage including fees and use this to compare rates. The APRC can be a good comparison tool if you don’t want to do the maths for every single product – these rates take fees into account as well and are featured prominently in the tables.
Finally, you may be certain that you want a fixed rate mortgage, but do you know what term you want to fix for? With more and more providers offering the longest fixed rate term of 10 years, there’s a wide field for you to pick from.
You’ll notice that the longer fixed terms tend to come with higher rates. That’s because you’re paying for the extra years of security, in which mortgage rates on the whole might be going up while yours won’t. That’s why it’s important to look at wider economic cues, such as whether the Bank of England base rate is likely to go up or down in the near future.
If rates are likely to go up, a longer-term fixed rate mortgage could be just what you need to get through years of uncertainty while keeping your monthly repayments stable. If it looks like they may go down, on the other hand, a two-year fixed term could be a better bet.
Armed with this knowledge, you should hopefully be able to easily use our Best Rate tables to find the cheapest fixed rate mortgage for your needs, but if you’re still not sure you could speak to our preferred independent mortgage adviser.