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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.
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 our partner, Mojo Mortgages, can search the market to find the best deal for your situation.
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.
"The Bank of England recently lowered the base rate to 4.25% to help manage inflation and support the economy. While this could lead to lower mortgage rates, it’s not a guarantee, lenders also look at things like their own costs and what the market’s doing. So, while the base rate plays a role, it’s just one of several factors that affect the mortgage deals you’ll actually see."
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 like Skipton Building Society, but they have a strict criteria. Most no-deposit mortgages require a family member to act as a guarantor or put up their savings as a deposit.
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.
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.
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%.
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.
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.
Confused.com is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.
Confused.com and Mojo Mortgages are part of the same group of companies.Confused.com 2nd Floor, Greyfriars House, Greyfriars Road, Cardiff, CF10 3AL, United Kingdom. Confused.com is a trading name of Inspop.com Limited and is authorised and regulated by the Financial Conduct Authority. FRN 310635
Mojo is a trading style of Life's Great Limited which is registered in England and Wales (06246376). We are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215). Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH.
To contact Mojo by phone, please call 0333 123 0012.
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