Compare Mortgages Rates

There’s a raft of different types of mortgage available. Here’s an outline and some more information on each one:

• variable rate. The interest rate – and therefore how much you repay each month – fluctuates in line with the Bank of England Bank Rate and/or the lender’s own central rate, known as the Standard Variable Rate or SVR (more on this below). You’ll benefit if your interest rate drops but you’ll need to pay more interest if it rises
• fixed rate. The interest rate is fixed for a set period of time, typically one to five years. Fixed rate deals make it easier to budget as you know exactly what you’ll pay each month. You’re also protected if interest rates rise. However, early redemption can come with significant fees
• standard variable rate (SVR). The go-to interest rate your lender will charge if your deal expires and you don’t sign up to another one. SVRs costs vary between lenders but are expensive compared to remortgaging to a different deal
• tracker. These are a form of variable rate mortgage where your lender links the amount you pay to another interest rate, usually the Bank of England’s base rate This offers some certainty around what you’ll pay but your monthly repayments can fluctuate
• discounted. Another variable rate mortgage, these guarantee that your interest rate will be a set amount below the lender’s SVR
• capped. These are also variable but a cap on the interest rate means you know your monthly repayments will never exceed a set amount
• offset. These link your savings to your mortgage, reducing the outstanding balance by the sum held in these linked accounts. That means you don’t pay interest on the portion of your mortgage that is matched – or offset – by your savings. If you’re saving more in mortgage interest than you would be earning on your savings, this can work in your favour.

When it comes to finding the right mortgage deal for you, this is what you’ll need to know:

Repayment or interest-only

With the exception of mortgages for buy-to-let, the vast majority (87%) of homeowners have repayment mortgages according to data from the regulator the Financial Conduct Authority (FCA).

This is where you pay the interest on the outstanding debt each month alongside a proportion of the capital debt. As you chip away at the debt, the amount of interest you pay reduces, and after a set number of years, the mortgage is paid off.

With an interest-only mortgage, you only pay the interest on the loan. This means your monthly mortgage payments will be lower than on a repayment mortgage – but you’ll still have the full debt to clear at the end of the term.

Lenders will want to see evidence of a repayment strategy, such as a savings or investment plan, or a pension, with any interest-only mortgage. Some lenders allow you to combine the two, so you clear some of the debt over the course of the mortgage, while the other part remains interest-only.

Where do you get a mortgage from?

For many borrowers, the best place to start is with a fee-free mortgage broker. Mortgage brokers use software to identify the most suitable products which can save you considerable time and legwork compared to hunting down the best deal yourself.

Brokers can also help with specialist requirements, such as if you are recently self-employed or your credit score is not up to scratch. We partner with Better.co.uk but there are plenty of broker options to consider.

You can also go directly to a lender – either your own banking provider or a different one. In fact there are around 340 regulated mortgage lenders in the UK according to the FCA, made up of banks, building societies, online lenders – and a broad range of specialist providers such as those offering deals for buy-to-let and to borrowers with a low credit score, for example.

How much deposit do you need?

Your deposit will also affect the mortgage deal you are offered. At a very minimum, you’ll usually need at least 5% of the cost of the property you’re buying – £12,500 on a £250,000 home, for example. But if you can afford to put down more, ideally at least 20%, you’ll get access to cheaper deals.

Lenders use the term loan to value (LTV) when referring to deposit size. For example, a 5% deposit on a £250,000 property would require a mortgage of £237,500 (£250,000 minus the £12,500 deposit). This equates to a loan to value of 95%. A 10% deposit on the same property of £25,000 would mean a LTV of 90%.

You can calculate different rates according to deposit with our range of mortgage calculators.

What fees are payable?

There are several fees you could be charged when taking a mortgage which we have set out below along with approximate costs for a £250,000 loan.

Potential fees on a £250,000 mortgage

NAME OF FEE	TYPICAL COST ON A £250,000 MORTGAGE	WHAT IT PAYS FOR
Mortgage booking fee	£150	A handful of lenders may charge this non-refundable fee to secure a mortgage
Mortgage product or arrangement fee	£999	Fee to arrange the mortgage which is applied to the best fixed rate and tracker deals
Property valuation fee	£300	Fee charged by the lender to ensure the property value is adequate security for the loan you want to secure against it
Legal fees	£800 to £1,500	Fee paid to the solicitor or property lawyer to carry out the conveyancing or legal work. The cost will vary based on the value of your mortgage
Broker fees (*many brokers don’t charge a fee to borrowers)	£700	Typical flat-rate fee if you use a fee-charging broker. Although some brokers may charge the fee as a percentage of the loan
Total estimated charges	£3,649

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There is also likely to be stamp duty to pay, but this will depend on the value of the property. First-time buyers are given a higher nil-rate band threshold for stamp duty, compared to other types of buyer.

Once your mortgage is up and running, there could be other costs to consider too. Early Repayment Charges (ERCs) which can be up to 5% of the outstanding loan, can be payable if you make an overpayment of more than 10% in one year, or you redeem (pay off) the mortgage during any tie-in period.

You will need a sufficient annual income, a deposit and a good credit score if you want to apply for a mortgage. But, before agreeing to lend you a penny, a mortgage lender will assess what you can afford to borrow.

This used to be a simple matter of taking your annual income and multiplying it by anything from three to five (sometimes more) to get a maximum loan.

But since lending rules became stricter back in 2014 under the Mortgage Market Review, banks now factor in all of your outgoings as well as your income before making a decision.

You can use an affordability calculator to help you crunch the numbers yourself. These provide an indication – but not a guarantee – of how much a lender might offer you.

Deals with the cheapest interest rates might seem most immediately appealing – but be sure to look at the deal as a whole, taking any upfront fees into account. Often, the cheaper the rate, the higher the fee.

The lender’s criteria will also play an important part. If it’s particularly strict you may not qualify for the deal.

A good mortgage broker will be familiar with lenders’ criteria and should be able to navigate in the right direction for your circumstances.

How do you improve your chances of getting a mortgage?

Here are a few simple pointers.

• gather all required information ahead of time. This includes payslips and a P60, or three years of tax returns if you’re self-employed. You will also need the last three months’ bank statements, photo ID and proof of address
• check your credit score before starting an application to ensure there are no surprises. It’s easy to do this online at a credit reference agency such as Experian, Equifax or TransUnion. If you spot any mistakes or inaccuracies contact the agency to get them corrected
• ensure you’re on the electoral roll by contacting your local authority
• save as much deposit as you can – this will broaden the range of deals available to you
• consider using a broker who will have the inside track on the best lenders to approach for your circumstances

Remortgaging is when you switch from your current mortgage lender to another one – usually for a better deal. This might be because your current deal expired and you were dumped onto the SVR, or it simply became uncompetitive.

Remortgaging is relatively easy to do and can save a significant amount of money. But it can also take time because, as a new customer, the lender will assess and credit check you from scratch.

You will also need to engage a solicitor or property lawyer to cover the legal side of the process, although if you are using a broker they will usually introduce you to one it partners with.

When remortgaging, make sure that you’re not going to be hit with any ERCs to leave your old deal before it expires. Paying ERCs can quickly make remortgaging a false economy.

There is also likely to be arrangement fees on the new loan.

We obtained data from our mortgage partner Better.co.uk, showing which lenders have offered the lowest rates on two and five-year fixed rate mortgage deals over the last three months. We used the median average cost across all deposit levels.

To arrive at our Forbes star ranking, we also considered average mortgage approval times (from submission to offer) over the last three months (the average is 40 days) and customer experience scores as determined by independent data provider, Fairer Finance.

All data was correct as of 5 November 2024 and mortgage offers from lenders listed are valid for six months.

However, these figures are averages. Exact costs of any mortgage will vary according to your deposit level (or equity you have in your property), credit score, and whether you opt to pay a fee to access a cheaper rate.

Mortgage rates and offers also change frequently – lenders that have presented the best value over the last three months may not present the best value in the next three months.

*Average mortgage costs can vary between sources depending on how the data is gathered. Better.co.uk’s data refers to the average cost of the primary fixed rate mortgage recommendation that is issued to applicants based on their circumstances from its 100-plus panel of lenders.

The data counts remortgage and purchase loans but excludes SVRs, adverse credit, self-build and shared ownership. Data is collected at the end of each business day. Better.co.uk targets applicants with a good credit history.

Lower loan-to-values (under 85%) account for a significant portion of its business which can translate into cheaper loan rates. Its average fixed rate costs may therefore appear lower than some others quoted on the market.