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A mortgage comparison from our experts could save you £3,528 a year*

Our trusted partner will compare mortgages across the market and show you a tailored list of deals you're eligible for

We’ve partnered with Mojo Mortgages to help you compare mortgages with an expert.

  • 100% free mortgage comparison and advice, with your own expert to guide you

  • Our partner is rated 'Excellent' on Trustpilot

  • They compare mortgages with over 70 lenders to find the right deal for you

*Mojo Mortgages customers saved an average of £294 per month for residential remortgages in 2023, against reverting to the average standard variable rate. Actual savings will depend on individual circumstances. 

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How do mortgages work?

A mortgage is a loan that you take out to buy a property. The mortgage is secured against the value of the property itself. You repay the loan plus interest to the bank or building society. Once you've fully repaid the loan, you own the property outright.

With a mortgage, you normally repay a specific amount on a monthly basis. Monthly mortgage payments are worked out using the following information:

  • Type of mortgage - Determines how much you need to pay every month. Most residential mortgages are taken out on a capital repayment basis which means you pay off a bit of the loan and some interest each month. But you can get interest-only mortgages (normally for buy-to-let purposes) which only require you to pay off the interest each month. The full loan is repaid at the end of the term.
  • Loan amount - Determines how much you need to pay back to your bank or building society. The more you borrow, the more you need to pay back. You can usually borrow a maximum of 95% of the property value so you need at least a 5% deposit. But the less you borrow in relation to the property value, which means a lower loan-to-value (LTV) ratio, the better rates you normally have access to.
  • Initial interest rate - This is the rate that you're charged on your borrowing amount at the start of the mortgage. If you are on a fixed-rate mortgage, this rate remains the same for the specified deal period. If you're on a variable-rate mortgage, it's subject to change. The lower the rate, the lower your monthly repayments. But look out for deals that have low interest rates and high fees, which can sometimes make them pricier overall.
  • Mortgage term - This is the full length of time you choose to hold or repay the mortgage. They usually last for around 25 or 30 years, but they can be shorter or longer (up to 40 years), depending on the lender. The longer the term, the lower the repayments but the more it costs you in interest over the lifetime of the mortgage.

What mortgage do I need?

There are several different mortgages types out there, each suited to people at different stages of home ownership:

  • First-time buyer mortgage - This is for those looking to buy their first property. Some lenders have products specifically for first-time buyers which may have certain incentives. But the vast majority of deals available to you are also available to current homeowners.
  • Remortgage - This is when you change from your existing deal to another one. When your initial deal period comes to an end, you're moved to your lender's standard variable rate (SVR) which is normally more expensive. At this point, many people choose to remortgage, either to a new lender or to a different deal with their existing one (known as a product transfer).
  • Buy-to-let mortgage - This is suitable if you’re looking to invest in a property to rent out to tenants rather than live in it yourself. Most buy-to-let mortgages aren't regulated by The Financial Conduct Authority (FCA) as they're seen as products for businesses.
  • Home mover - For home movers, you may be able to port your mortgage to your new property. Or you can remortgage to a new deal, but you may have to pay exit fees for leaving your existing mortgage early.

Who is Mojo Mortgages?

We've partnered with an expert broker to help borrowers save on their biggest monthly expense.

Say goodbye to endless paperwork and confusing jargon - Mojo's digital journey changes the way you get mortgages as you know it. Just answer some questions about your situation and let Mojo's expert advisors guide you to a mortgage tailored to your needs. And the best part of it all is, it’s completely free (yes, really!).

With access to lenders across the whole of the market, Mojo advisors strive to save you money and find your best mortgage deal.

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What mortgage can I afford?

When determining what mortgage you can afford, a lender looks at the following:

  • Your income - You can normally borrow around 4.5 times your annual income
  • Your deposit - It must be at least 5% of the property value or price (whichever is lower)
  • Your spending habits - Lenders look at outgoings to check you can afford the repayments
  • Your credit history - Banks and building societies use your credit history to see if you can manage debt

It's important to do a financial review yourself to make sure you can afford a mortgage before taking it on. This may give you a chance to identify any spending habits you could cut back on, helping you when you apply.

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Types of mortgage rates

Choosing the right mortgage rate is an important step in getting a good deal. Some mortgages have fixed interest rates, and some have variable, so might change regularly.

It’s important you understand the different types so you can choose one suited to your financial situation.

  • A fixed rate mortgage has an interest rate that’s fixed for an agreed term. If you have a strict budget, a fixed-rate mortgage could work for you as you don't have to worry about your rate (and repayments) rising. But you won't benefit from lower repayments if rates fall.
  • A variable rate mortgage is different to a fixed rate deal as the interest rate can change during the deal period. It can go either up or down meaning your repayments are subject to change. The 3 main types of variable rate deals are standard variable rate (SVR) mortgages, discount mortgages and tracker mortgages.
  • A standard variable rate mortgage (SVR) is what your lender switches you to when your introductory period ends. Each bank or building society sets their own SVR and it tends to be a higher interest rate compared to other types of mortgages. So many people remortgage to another deal at this point.
  • A discount mortgage rate is set at a fixed amount below the lender's SVR and rises and falls alongside it. With discount and tracker mortgages, you may also get floors (the rate can't fall below a certain amount) or, more rarely, caps (the rate can't rise above a certain amount).
  • Tracker mortgage rates are tied directly to an external financial indicator, normally the Bank of England base rate. Your rate is normally set at a fixed amount above the base rate and changes alongside it.
  • An offset mortgage links your savings to your mortgage deal. You pay less interest on the debt as your savings amount offsets the mortgage loan, meaning you only pay interest on the difference. Offset mortgages are available with fixed or variable rates.

How to get the best mortgage rate for you

We can't tell you exactly what your best mortgage rate is as it depends on a number of things, including the LTV ratio and your financial circumstances.

But we've partnered with mortgage broker, Mojo Mortgages, whose experts can look across the market to find the best mortgage rate and deal that suits your circumstances.

Remember to consider all the fees involved with each deal when comparing them. A mortgage might have a low rate but high fees, making it more expensive than other options overall. 

If you choose a variable-rate deal, you should also make sure you can afford higher repayments if rates rise. 

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How much deposit do I need for a mortgage?

You normally need at least a 5% deposit for a property. This would give you a 95% LTV mortgage, but the lower the LTV ratio, generally the better deals you get access to.

This means some may choose to put down a larger deposit if they can afford to. The best rates tend to be available for those with 40% deposits or more.

There are also a very limited number of 100% mortgages on the market, which don't require a deposit. Skipton Building Society is an example of a lender who offers these, but their lending criteria is strict. Most no-deposit mortgages require a family member to act as a guarantor or put up their savings as a deposit.

First-time buyer schemes

There are several home ownership schemes to help first-time buyers, including:

  • A Lifetime Individual Savings Account (LISA) gives you a 25% bonus on top of your savings. You must be aged between 18 and 39, and you can add up to £4,000 into the account each year. The money must be used for your first home or retirement, otherwise you lose the bonus money and may face penalties on your withdrawn savings.
  • Shared ownership allows you to buy a percentage share of a home and pay rent on the remaining amount. You can increase your share over time until you own the property fully.Lifetime individual savings account (LISA).
  • Help to Buy equity loans are only available in Wales, and let you borrow up to 20% of the purchase price of a new-build property. You need at least a 5% deposit to take advantage of this scheme.
  • Right to Buy may help you to buy your council home. Right to Acquire is a similar scheme for housing association tenants.
  • The mortgage guarantee scheme is an initiative by the government to increase the number of 95% LTV mortgages in the market. They provide a guarantee to participating lenders to encourage them to offer these high LTV deals.

What our mortgage expert says

"Getting a mortgage can be a difficult process. But in the current market, with rates changing quickly, it can be even harder to find a deal that meets your needs. Let our Mojo experts help find a mortgage that works for you and your circumstances."

Claire Flynn, Senior Content Editor at Mojo
Senior Content Editor | Mojo, Mortgages Expert | Confused.com Mojo logo

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Need more help?

How long does it take to get a mortgage?

According to HomeOwners Alliance, you can expect to wait around 2 to 4 weeks between applying for a mortgage and it getting approved.

But this might not be the case for you – it could take longer. It depends on your individual circumstances and a mortgage broker can keep you updated on your application.

What affects mortgage rates?

Mortgage interest rates are affected by:

  • LTV ratio
  • Individual financial circumstances
  • Bank of England base rate

The lower the LTV ratio, typically the better mortgage deals you get access to. So it can be worth trying to save up a larger deposit in order to get a lower rate.

Lenders also look at your individual financial circumstances when determining what they are willing to lend you. If you have a poor credit history, they might see you as more of a risk and charge higher interest rates as a result.

The Bank of England base rate, which changes based on wider economic issues and inflation, directly influences tracker mortgage rates. But it also influences SVRs and discount mortgage rates.

Fluctuations in the base rate normally also mean the fixed rates available in the market may change (although those already locked into a fixed deal won't see any change in their rate).

What's an agreement in principle?

An agreement in principle (also known as a decision in principle or mortgage in principle) is an indication from a bank or building society that they could lend you a certain amount towards a property.

This gives you a rough idea of what kind of property you can afford to buy. And estate agents may only take your offers seriously if you have one.

You're not committing to anything with an agreement in principle. But that also means you're not guaranteed to get that amount when it comes to applying for the mortgage.

What is LTV (loan to value)?

LTV is a percentage that shows how much you’ve borrowed based on the value of a property. Let’s take an example.

If your property is worth £300,000 and you put down a deposit of £30,000, then your mortgage is £270,000. As your deposit is 10% of the property’s value, your LTV is 90%.

What is APRC?

APRC means the Annual Percentage Rate of Change.

Most mortgage deals have 2 different rates when you first apply - an introductory rate and an SVR. They also have different fees. This means it can be difficult to work out which overall deal is better for you.

The APRC takes this into account. It brings together the different rates and fees to show you the annual cost of a mortgage over its full term. This can make it easier to compare mortgage deals.

For example, it could be that one mortgage has a lower introductory rate but a higher SVR. This might make it less of a good deal compared to one with a higher initial rate but a lower SVR.

But bear in mind that most people remortgage after their initial deal period, avoiding the SVR. It can still be worth looking at the initial rate as well for this reason.

What are mortgage fees and how much will they cost me?

When you get a mortgage, you may have to pay certain fees and charges, such as an arrangement fee, valuation fees and legal fees.

The amount you pay depends on the deal you choose. It's important to look closely at these fees when comparing mortgages, and a broker can help explain them to you.

What happens to my mortgage if I move house?

There are a few options for your mortgage when you move home. You might be able to port your current mortgage over to the new property. It's worth checking if your bank or building society allows this.

You could also remortgage to a new deal. But you may face early repayment charges (ERCs) for leaving your existing deal, and these can amount to thousands of pounds.

A mortgage broker can help you work out the right option for you, based on your circumstances and your existing deal.

Can I pay off my mortgage early?

If you’re thinking about paying off your mortgage early, some lenders might let you make increased monthly payments. Or you might be able to put down a lump sum as a single large mortgage overpayment.

Most lenders have limits on how much you can overpay before being charged ERCs, though. Get in touch with your mortgage provider to check what rules they have around overpaying on your mortgage.

If you're currently on the SVR, you won't face any ERCs. This is also the case for certain tracker products.

What’s the difference between a repayment mortgage and an interest-only mortgage?

A repayment mortgage is exactly how it sounds. You repay part of your mortgage every month. Each repayment includes part of the money you borrowed and part of the interest that the provider is charging you.

At the end of the mortgage term, you've paid off the full amount you borrowed. And once it’s all been fully paid off, you own your property outright.

An interest-only mortgage means you only pay the interest each month. So, your payments aren't reducing the total mortgage debt.

At the end of the mortgage term, you still have to pay back the total balance of money you borrowed. Once you’ve done that, you own your property outright.

Interest-only mortgages are very rare for residential properties and are normally used for buy-to-let mortgages.

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Page last reviewed: 22 November 2023

Reviewed by: Claire Flynn

YOU SHOULD THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME/PROPERTY. YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. 

The Financial Conduct Authority does not regulate mortgages for commercial or investment buy-to-let properties. 

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