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Best mortgage rates
A Guide to Getting the Best Mortgage Rates

Want the best mortgage rates?  This article will help you compare mortgage rates to get the best mortgage rates on the UK market.  There are many different types of mortgage products available (buy-to-let mortgages, interest-only mortgages, offset mortgages) but there are only a few main types of mortgage interest rates on offer. They are:

  • fixed rates

  • variable rates

  • tracker rates

  • discount rates

When searching for the best mortgage rates, the majority of home loan borrowers prefer stability and choose fixed rate mortgages over variable rate home loans.  When you compare mortgage rates, you'll likely find that the most popular mortgage deals which tend to offer the best value-for-money are those that offer an initial special rate - either fixed or variable - for a set period of time,  normally between two and five years.  After this initial deal period has expired, borrowers will generally pay back their mortgage at the lender's standard variable rate.

To find the best mortgage rates, know that reputable lenders will allow borrowers to leave at a minimal cost once the initial deal period has ended. They can take up a new deal after comparing other available mortgage rates and securing one which suits their budget and lifestyle. 

It is wise to shop around and check and compare mortgage rates regularly to guarantee you get the best mortgage rates on offer.

Compare Mortgage Rates:

Fixed rate mortgages

Fixed rate mortgages suit those who:

  • enjoy the security of having fixed regular repayments

  • may have over-stretched themselves to purchase a property

However, when you compare mortgage rates, you'll find that fixed rate deals may not be the best mortgage rate as they are generally higher than variable special offers and many lenders have high fees for their best deals.

If you choose this type of mortgage rate, make sure that your loan is portable and so can be carried with you if you decide to move house with the same lender.

Standard variable rate mortgages

If you are a borrower who does not bother to regularly check and re-assess your mortgage deal, you may end up paying a standard variable rate.

The repayments on these types of mortgage rates are not the best mortgage rates and tend to be unfavourable when you compare mortgage rates and special offers available on the market. The standard variable rate moves broadly in line with the rate established by the Bank of England, although it is not compulsory for your lender to pass on any savings to you. 

Discounted rate mortgages

This type of mortgage rate is linked to a lender's standard variable rate. However, it tends to track or follow the variable rate at a discount of between 1% and 2%.

When you compare mortgage rates, you'll find that these deals can leave you exposed to the danger of fluctuating interest rates, as the rate will rise when the bank rate does.  The advantage, however, is that these rates tend to be more competitive than fixed-rate deals.

Tracker rate mortgages

This type of mortgage rate works in a similar way to standard variable rate mortgages.  The difference lies in the fact is that the mortgage tracks the Bank of England base rate rather than the lender's standard variable rate.

Tracker rate mortgages can be one of the best mortgage rates, as you are guaranteed to benefit from the full impact of any rate cut. The downside, of course, is that you are also exposed to the dangers of interest rate increases.

Some points to consider when you compare mortgage rates

  • Be aware of the many lenders who only offer special initial rates—some of the best mortgage rates you'll see—in the hope that after they expire, you will forget or be too lazy to switch your existing mortgage to one with a more favourable rate. They hope that, out of sheer convenience, you will automatically end up paying the exorbitant rates on their standard variable rate mortgages.

  • Additionally, when you compare mortgage rates, be wary of lenders who lock you into a deal which imposes a penalty fee if you want to move the deal within a certain time-frame. For example, a 3-year fixed rate deal might have a 'collar' that stops you switching deals for a further 2 years. Try to avoid these types of deals (not the best mortgage rates), and insist on deals with no extended redemption penalties.

  • Before you take up any mortgage, compare mortgage rates to ensure you the mortgages on offer don't carry any early repayment charges. If they do, they could make it financially difficult for you to leave the mortgages in search of the best mortgage rates during a deal period.

  • Although moving your home loan to one with the best mortgage rates can save you money, be aware that frequently switching deals can prove an expensive business. When you compare mortgage rates, know that every time you switch, you will face a charge that could be as much as a few months' of interest charges.  You need to factor these costs into the equation when deciding whether to move your mortgage. The savings you hope to make by securing better mortgage rates (even the best mortgage rates) could be cancelled out if you have to pay out heavy administration costs—something to definitely keep in mind when you compare mortgage rates.

Check out the best mortgage providers

 
 
 
 
 
 
 
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