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
Mortgages are a type of secured loan that help people to buy a property. Because most individuals don’t have the cash to buy a property outright, many will need to borrow money from a mortgage lender for their purchase.
A mortgage will cover a certain proportion of the property’s value, with the borrower responsible for putting down the money for the remaining amount. The percentage of the property you need to finance is known as the loan-to-value (LTV).
For example, if you have a £70,000 deposit or own £70,000 in your home outright (known as equity), and the property is worth £350,000, your LTV is 80%. (£70,000 is 20% of £350,000, which means you need a mortgage to pay for the remaining 80% of your property’s value).
As with any loan, the mortgage lender will charge interest on the amount borrowed. This could be a fixed or variable rate, depending on the type of mortgage taken out.
Borrowers will typically then make monthly repayments to pay off the sum they borrowed (plus the interest charged) during the term, or until the debt is cleared.
Most mortgages have lengthy repayment terms of 25 years or longer. Bear in mind that, while extending your mortgage term can reduce your monthly payments, you will end up paying more interest overall. This is why it’s often a good idea to choose as short a term as possible.
Within the total mortgage repayment term, it’s possible to lock in mortgage rates for a shorter period, such as two, three or five years.
The interest rate that mortgage lenders charge is crucial as it determines your monthly repayments and how much it will cost you to borrow over a certain period.
Lenders charge interest on mortgages as a percentage of the total amount you borrow. The lower the interest rate, the cheaper your mortgage.
Mortgage interest rates can be fixed or variable. As the names suggest, a fixed mortgage means the interest rate and your payments won’t change for the specified term, while the interest rate could change on a variable mortgage. See more information on the different types of mortgages in the following section.
When you compare mortgage interest rates, you’ll notice that lenders will display several different numbers.
Firstly, the initial interest rate charged (which is what most borrowers will focus on) is the rate you pay for a specified period, such as two, three or five years. It may be fixed or variable. At the end of this period, you can remortgage to a new fixed or variable deal.
If you don’t remortgage to a new deal, the mortgage will automatically revert to a different (usually higher) rate once the introductory rate ends. This is normally the lender’s Standard Variable Rate (SVR) and is displayed alongside the initial interest rate.
Finally, each mortgage deal will show an annual percentage rate of charge (APRC) which tells you the annual cost of a mortgage, including the initial interest rate, the SVR and any fees charged. It is a useful guide as it allows you to compare the total cost of a mortgage on a like-for-like basis with other products on the market.
Bear in mind the APRC is based on the full mortgage term and assumes the interest rates won’t change and that you don’t remortgage to a new deal once your initial rate expires. As a result, the total cost of your mortgage is likely to end up being different to the APRC. This is why the initial interest rate charged will often be a more significant factor for most borrowers as part of their mortgage comparison.
There are several types of mortgages to choose from in the UK.
Most residential mortgages are repayment mortgages (or capital and interest mortgages), which means your monthly payments will pay off the capital borrowed and the interest. This means, once you finish making payments, your mortgage will be fully repaid.
In contrast to repayment mortgages, the monthly payments for an interest-only mortgage solely cover the interest charged. This means, at the end of the term, you will need to repay the capital using money from another source.
Interest-only mortgages aren’t very common and are typically only available on buy-to-let properties or in selected situations.
As the name suggests, fixed rate mortgages mean you pay a fixed rate of interest for the specified term. This means the interest rate and your monthly payments will stay the same for this period, even if the market changes and mortgage rates rise or fall. Lenders typically offer fixed deals for terms of two, three or five years, although longer fixes may be available.
Fixed mortgages can help you to plan your budget as you’ll know exactly how much you need to ring-fence for your mortgage repayments each month.
Unlike fixed deals, the interest rate on variable mortgage deals can change. This means your payments could go up or down.
There are different types of variable rate mortgages, including tracker mortgages which usually follow the direction of the Bank of England’s base rate. For example, if the base rate drops by 0.25%, the interest rate on a tracker mortgage should drop by 0.25%.
Lenders also have a Standard Variable Rate (SVR) which is the rate you revert to once a fixed deal ends. This can go up or down at the lender’s discretion and doesn’t necessarily follow the exact changes in the base rate, unlike tracker mortgages.
Furthermore, some lenders offer discounted variable rate mortgages. These follow the direction of the lender’s SVR, but at a slightly lower rate. For example, if the SVR is 7.5%, a discounted variable rate may charge 5.5%. Lenders may set a “floor” or “collar” so the interest rate can’t drop below a certain level, or a “cap” that the interest rate can’t go above.
Offset mortgages use money in a savings account to reduce the amount of interest charged. This means you could reduce your monthly payments or shorten your mortgage term. It’s an alternative to putting down a larger deposit or paying off your mortgage early and means you can still access this money if necessary (although any withdrawals will affect your mortgage).
Lenders deduct the amount you have in savings from your mortgage balance and charge interest on the remainder. This means you pay less interest on your mortgage, but bear in mind your savings typically won’t earn any interest during this period.
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.
| Good if: | Not so good if: | |
| Fixed rate mortgages | You want to know exactly how much your monthly mortgage repayments will be. | You think mortgage rates might go down and are worried you'll end up paying over-the-odds on a fixed rate deal. |
| Variable and tracker rate mortgages | You believe mortgage rates will go down in the foreseeable future. | You're on a tight budget and need to know exactly how much your mortgage repayments will cost you every month. |
| Offset mortgages | You have a decent savings pot you are happy to leave untouched for a period. | You may have to dip into your savings or want to earn savings interest. |
A wide variety of factors affect UK mortgage rates. Some of the elements that lenders consider when pricing their deals include:
The Bank of England's base rate
The base rate affects how much it costs lenders to borrow money from the Bank of England, which in turn influences how much it costs consumers to borrow. When the base rate goes up, this often causes mortgage rates to go up.
Inflation and other economic factors
Because inflation affects the base rate and the wider economy, it can also affect mortgage rates. Unemployment and wage growth are just a couple of other factors that can indirectly have an impact on mortgage pricing.
Swap rates
In basic terms, these are the rates that mortgage lenders pay for their fixed deals based on their expectations of what the base rate will be in the future. Higher swap rates mean lenders are likely to price their deals higher. Swap rates can be influenced by other economic factors as well as the base rate.
Political events
Government policies and announcements can affect mortgage rates. This was particularly noticeable in September 2022 when the mini-Budget caused shockwaves across the mortgage market.
Global events
It’s not just major events in the UK that can affect its mortgage market, as global crises and actions by different countries across the world can significantly influence rates. For example, the recent US-Israeli attack on Iran and the subsequent conflict in the Middle East completely changed the outlook for the UK and global economy, which in turn forced mortgage lenders to unexpectedly increase interest rates.
The lender's own situation and funding requirements
While lenders will consider external factors when setting their mortgage rates, their own circumstances and targets will also influence the rate they charge. For example, their risk appetite, funding levels and how competitive they want to be will affect where a lender sets its mortgage rates.
It’s also worth noting that your own individual situation affects the mortgage rate you receive, such as your credit history, your financial situation and the proportion of the property you need to finance.
After rising rapidly in the aftermath of the 2022 mini-Budget and peaking in August 2023 due to a succession of base rate increases, UK mortgage rates generally remained on a downwards trend over the next couple of years.
This was expected to continue into 2026, but the conflict in the Middle East that broke out at the end of February has reversed these expectations.
Since the conflict, mortgage rates have rocketed as lenders withdrew products from the market and hiked rates on their deals. This is largely because inflation is expected to rise (due to the fallout of events in the Middle East), which in turn could lead the Bank of England to raise the base rate once again.
These events highlight how difficult it is to predict the direction of mortgage rates as the market can change rapidly in response to events in the UK and across the world. The volatility and uncertainty caused by the war in Iran completely changed the outlook for mortgage rates, and it’s impossible to say with any confidence what will happen to the cost of mortgages over the coming months, let alone years.
The UK lenders offering the best mortgage rates can vary all the time. Furthermore, it isn’t just the main high street banks that necessarily offer the most competitive deals as building societies and specialist lenders could offer some of the lowest mortgage rates for UK borrowers.
Lenders may also focus and specialise in offering different types of mortgages. For example, one lender may offer the lowest two-year fix for remortgages while a different lender may offer the lowest five-year fixed rate for those looking to move home.
Similarly, certain lenders may specialise in offering higher loan-to-value (LTV) mortgages to first-time buyers or to borrowers who may have poor credit histories, for example.
For an up-to-date list of the best mortgage rates UK lenders currently offer, select the charts above. But bear in mind the lowest mortgage rates UK lenders offer won’t necessarily be the best or cheapest option for you.
Whether you are eligible for a mortgage depends on a number of factors, including your individual circumstances, such as those listed below.
Your income and outgoings
Lenders will want to see that you can afford the monthly repayments of a mortgage. They will assess your income and usual expenditure (including any existing debts) to see how much you can realistically afford to borrow.
Your employment status
Whether you are employed or self-employed, for example, could affect your eligibility for a mortgage as you will need to show lenders you have a reliable source of income. Being in full-time employment at the same company for several years could make it easier to get a mortgage, whereas those who are self-employed whose income may fluctuate may need to provide more documentation or meet stricter requirements.
The size of your deposit or the equity you own in your property
This directly influences the amount you need to borrow and so will be a major factor in determining your eligibility. The higher your deposit or the more equity you own, the better your chances of securing a mortgage (and accessing a more competitive deal at a lower loan-to-value).
Your credit score
The lender will assess your credit history to see your record of making payments and managing your credit commitments. A good credit score could help your application as it indicates you can be relied on to make your mortgage payments in full and on time, while a poor credit score could make lenders view you as a higher risk and make them more cautious about lending to you. However, having a less-than-perfect credit history may not necessarily stop you from getting a mortgage as there are specialist deals available for those with adverse credit.
The property you want to secure the mortgage on can also affect your eligibility. Lenders conduct their own valuation of the property to satisfy themselves that it’s acceptable and meets their criteria. Some properties may not be eligible for a standard mortgage (if they’re of an unusual construction or considered to be unsafe or uninhabitable, for example). Moreover, if the lender considers a property isn’t worth the price you’re paying for it (known as a down valuation), this could affect your mortgage application.
Finally, it’s worth bearing in mind that some mortgage deals come with their own specific requirements. For example, borrowers may need to live in a certain area, have a current account with the lender, or be buying an energy-efficient home to access a particular mortgage deal.
It’s possible to get a mortgage if you’re self-employed, as long as you can prove you can afford to repay it. Because the income of self-employed individuals may fluctuate more than someone in full-time employment, lenders are likely to want to see more evidence of your financial situation, such as an SA032 form to show your earnings over the last few years.
If you’ve recently gone self-employed and don’t have years of documents to act as evidence of your earnings, you may find it more difficult to get a mortgage, but not impossible. Even if some mainstream lenders don’t accept your application, more specialist lenders may be able to offer you a deal, although this could be more expensive.
Anyone applying for a mortgage when self-employed could improve their chances by demonstrating a stable income, showing evidence of future work, and by putting down a larger deposit. In some cases, applying with another individual could also boost your chances.
If you need more support, a mortgage broker can offer advice on your situation and help match you with a mortgage deal that is suitable for self-employed borrowers.
Before applying for a mortgage, you can get an idea of how much you could borrow from a lender by completing a mortgage in principle. Also known as an agreement in principle, this can help you see if you could get approved for a mortgage, based on the information you provide and a soft credit check by the lender (which won’t affect your credit score).
Bear in mind that, while this can give you an estimate of how much you could borrow, it isn’t a guarantee. Lenders will conduct more in-depth financial checks and a hard credit check when you formally apply for a mortgage, before making a final decision on whether to approve your application or not.
The mortgage application process, from submitting your information and the relevant documents to receiving a decision from the lender, could take a couple of weeks, sometimes even longer. Several lenders say it could take up to six weeks to review an application and make a formal offer (if successful). Borrowers with more complex situations are likely to face a longer wait to hear if their application has been approved.
When you’re ready to apply for a mortgage, it’s a good idea to set aside an hour or so to complete the application form as there is a lot of information you need to provide. Furthermore, you often need to supply the lender with a range of documents, such as payslips and bank statements, so make sure you have these to hand when applying so you don’t delay the process.
The key to finding the best mortgage deal is research. It’s important you don’t just choose the first deal you see, or a mortgage offered by your bank account provider, as this may not necessarily be the best option for you.
Instead, you should compare options, by using our whole-of-market mortgage rate comparison charts, for example.
As well as looking at rates, it’s just as crucial to assess the other features of a deal to make sure it’s the best fit for your situation.
For example, you should make sure the maximum LTV on a deal is sufficient for the amount of your property you need to finance.
You should also consider all the fees charged by a lender and the extra incentives a deal may offer (such as free valuations, free legal fees, cashback and “green home” rewards), as these will help determine the overall value of a deal.
It may be worth checking the lender’s rules on overpayments and any early repayment charges (ERCs) it may apply, especially if you think you will want to pay more than your monthly payment.
Furthermore, some mortgages are only available in certain areas or for certain types of properties or borrowers, so always check the eligibility criteria of a deal.
This can be a lot to think about, so many borrowers may find it useful to speak to a professional mortgage broker.
Mortgage brokers, or advisers, can offer independent support and guidance to help you find the best mortgage deal for your circumstances, so you’re not left on your own to figure out which deal to apply for.
Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
Mortgage calculators are helpful tools that can give you an indication of how much a mortgage could cost you and the property price you could afford.
You can input different figures and make adjustments before applying for a mortgage, so you know more about how much you can realistically afford.
It’s worth noting that using a mortgage calculator won’t require you to put in any personal information or affect your credit score.
There are a range of different calculators available, each serving different purposes.
How much can I borrow calculator
By inputting your annual income, you can see an estimate of how much you may be able to borrow.
This simply works out the loan-to-value (LTV) you need for your mortgage, based on the property's value and the amount you need to borrow.
Once you start comparing mortgages, this calculator allows you to see the estimated cost of the monthly payments, based on how much you want to borrow, the mortgage term and the interest rate.
While the exact amount you can borrow and your monthly repayments may vary from those given by the calculators, they can still act as a useful guide if you’re at the start of the mortgage and home-buying process.
How long you fix a mortgage for is a personal decision. If you want the peace of mind that your monthly payments won’t change, you may want to consider a five-year fix or longer. Long-term fixed deals may be particularly appealing if you think mortgage rates may rise in the coming years, but this also means you won’t be able to take advantage of lower rates if they fall (unless you choose to pay a fee to leave your deal early).
Alternatively, if you think mortgage rates could fall, you may opt for a two-year fix in the hope that you will be able to lock in a lower rate once your existing deal ends. However, if rates rise, you could end up paying more than if you’d opted for a longer fixed deal.
The mortgage market can be unpredictable so there’s no right answer to how long to fix for. Speaking to a mortgage broker could help you decide which option to choose.
It’s impossible to say whether it’s better to fix your mortgage for two or five years as this depends on your individual preferences and the direction of mortgage rates over the next few years.
Two-year fixed rates are typically lower than five-year fixed rates, although volatility in the market means this isn’t always the case. Visit our mortgage comparison charts to see an up-to-date list of the two- and five-year fixed rates available.
Bear in mind that a longer deal means you’re protected if rates rise, but those on a two-year fix could end up better off if rates drop as they would be able to lock into a cheaper deal at the end of the term. Speak to a mortgage broker if you need advice tailored to your situation.
Depending on your situation, it may be possible to get better mortgage rates with your bank. For example, some banks may offer more attractive rates to customers who have a certain current account. However, just because these banks may offer lower rates to some of their customers than to other borrowers, it doesn’t necessarily mean they offer the best rates on the market. Other banks and lenders may offer even more competitive rates, which is why it’s so important to compare deals from a range of providers. Visit our UK mortgage rates chart above to view all the available options.
Mortgage deals often come with a range of fees, which may include:
Depending on the lender and/or broker you use, some (or all) of these charges may not apply. Bear in mind that lenders may give you the option to add some of these fees to your mortgage, but this is likely to cost more in the long run than paying them upfront.
Aside from the mortgage-related fees, some other costs of buying a home could include solicitor fees, Stamp Duty and survey fees.
There are several ways you may be able to improve your chances of getting a mortgage, including:
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