**On average, it can take less than 1 minute to complete a mortgage comparison through Compare the Market based on data in November 2020.
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What mortgage do I need?
First time buyer: A first-time buyer mortgage is aimed specifically at people buying a property in the UK for the first time. Buying your first home is a huge commitment, so our comparison tool can help you play around with deposits vs. borrowing amounts, to find a mortgage rate that can help you achieve that dream.
Remortgage: Remortgaging is the process of switching your existing mortgage to a new deal, using the same property as security. You can remortgage with the same lender or a different provider.
Homemover: If you’re selling your current property and buying a new one, the proceeds of the sale will be used to repay your existing mortgage. You then take out a new homemover mortgage with your current provider or a new lender.
Second charge mortgage: As the name implies, a second mortgage will mean that you have two mortgages on your home. It is a secured loan taken out in addition to your first mortgage, against the equity in your property
Buy-to-let mortgage: A buy-to-let mortgage is a secured loan that’s specifically designed for people who want to invest in a property, whether a house or flat, in order to rent it out to tenants.
How to get a mortgage
To compare mortgages with us, you’ll need to tell us the type of mortgage you’re looking for, the property value, your deposit and the period of time you want to repay the mortgage. It’s important you understand what’s available, what you can afford and the fees you might need to pay.
If you’re ready to continue on your mortgage journey without comparing products, please contact our trusted mortgage partner London & Country Mortgages Ltd for fee-free advice on a comprehensive range of mortgages from across the market.
Ready to get mortgage advice?
We’ve partnered with London & Country Mortgages Ltd (L&C)** to provide you with fee-free mortgage advice. Get in touch with one of their advisers here.
About London & Country Mortgages Ltd (L&C)
**London & Country Mortgages Ltd (L&C) are a multi-award winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002).
L&C are not part of Compare the Market Limited. Compare the Market receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.
L&C will not charge you a broker fee should you decide to proceed with a mortgage.
What mortgage can I afford?
When looking at mortgage tables and comparing providers’ rates, it’s important to get an idea of what you can afford and how likely it is you’ll qualify for what you’re hoping to borrow.
Mortgage providers will look at a range of factors when deciding whether to lend to you. These include:
- your income
- how much deposit you have
- your debts
- your spending
- whether you can afford the mortgage you want
They’ll want to know about your history of paying back debt, so they’ll also look at your credit score to assess the risk of lending to you. A high score will show them you’re able to manage your money and might make better deals available to you.
To help you get an idea of your mortgage options, try our mortgage calculators:
Basic mortgage calculator: a quick and easy way to help you work out how much you could borrow. But remember, the actual amount you can borrow will depend on several factors, like the deposit you have, any outstanding debt and your monthly outgoings.
Remortgage calculator: coming to the end of your fixed-rate, discount or tracker deal? See how much your monthly payments could increase if you don’t remortgage.
Equity release calculator: over 55 and want to release some of the value of your home? Get an idea of the options.
When considering mortgage affordability, it’s important to know that your home or property may be repossessed if you do not keep up with your mortgage repayments. Therefore, you need to ensure that you’re comfortable with the monthly repayments for your agreed term.
Frequently asked questions
When will the stamp duty holiday end, and what happens next?
Stamp Duty Land Tax (SDLT) is a tax that buyers in England and Northern Ireland pay when they buy a property. In response to the coronavirus pandemic, the government temporarily reduced stamp duty rates from 8 July 2020 until the end of June 2021.
From 1 July, stamp duty relief will be ‘tapered’ until the end of September 2021. So, from July to October, it will be payable on the cost of properties above £250,000. Then, from 1 October 2021, the threshold will go back to what it was before the holiday – £125,000.
The temporary holiday on Land Transaction Tax in Wales also ended at the end of June. From 1 July, a 3.5% tax for properties priced between £180,000 and £250,000 will be payable.
The holiday on Land and Buildings Transaction Tax in Scotland ended on 31 March. A 2% tax applies for properties priced between £145,000 and £250,000.
Read more on stamp duty for first-time buyers, second home buyers and rates in stamp duty explained.
See more on Land Transaction Tax
See more on Land and Buildings Transaction Tax
How is COVID-19 affecting house moves?
The housing market in England is open. However, the process of finding and moving into a new home has changed to reduce the risk of spreading coronavirus. For example, you and your household should try to do as much of the packing yourself as you can, and your property will need to be thoroughly cleaned before someone else moves in.
For full details, see Government advice on home moving during the coronavirus (COVID-19) outbreak.
In Wales, moving house is allowed, but everyone is encouraged to do as much of the process online as possible.
See more on moving home in Wales during the pandemic.
In Scotland, all home moves are permitted as long as they can be carried out safely.
See more on moving home in Scotland during the pandemic.
In Northern Ireland, house moves are allowed, but should follow government guidelines.
See more on moving home in Northern Ireland during the pandemic.
Please note: This information was correct at the time of publication on 4th June 2021 but, because of the impact of COVID-19, things can change. We aim to keep this page updated, but please check with your mortgage provider or potential provider to confirm any details.
What should I do if I’m having difficulties paying my mortgage because of coronavirus (COVID-19)?
If you’re having difficulties making your mortgage payments, then contact your lender. The deadline for applying for a mortgage holiday ended on 31 March 2021, but the government has agreed with mortgage lenders to offer individual help to households with financial problems because of the coronavirus pandemic. The Financial Conduct Authority (FCA) has also issued guidance to make sure that home repossessions should only happen as a last resort and when all other reasonable attempts to resolve the situation have failed.
What is a mortgage?
A mortgage is a loan used to buy a property, where the amount you borrow, plus interest, is secured against the value of the property. You’ll then have to make monthly payments, including interest, until the loan has been paid back in full.
To qualify for a mortgage, you’ll be expected to make a deposit on the property. This is usually a minimum of 10% of the property’s value. The larger your deposit, the less you need to borrow, which will make your mortgage cheaper.
95% mortgages are available, but they have been very difficult to get because of the coronavirus pandemic. However, they may soon become more widely available, with the launch of a new government-backed mortgage guarantee scheme to help homebuyers get a mortgage of up to £600,000 with a 5% deposit.
What are the different types of mortgages?
We’ll let you compare mortgages by type, which include either fixed or variable rate mortgages. The interest rate paid for variable rate mortgages is determined by the lender, which means the interest rate and payments can go up or down. For fixed rate mortgages, the rate is set at an agreed amount, for a set period of time and only changes at the end of the initial agreement.
The types of mortgage rates
With a fixed rate mortgage, the interest on your mortgage is fixed at a set interest rate for an agreed period of time, typically between two and 10 years. This type of mortgage could be good if you need to stick to a budget.
Once the fixed rate deal is over, you’ll be automatically switched to your mortgage provider’s standard variable rate (SVR) unless you choose to find a new deal.
Tracker: This type of mortgage has an interest rate that’s tied to the Bank of England base rate. The mortgage changes with the base rate. Most trackers last two or five years, but you can get lifetime (also known as term) tracker mortgages.
Discount: Another type of variable mortgage, discount mortgages are different from trackers in that they’re not tied to the Bank of England base rate – they’re a bit more unpredictable. Instead, they’re linked to the lender’s standard variable rate (SVR), usually for between two and 10 years. With a discount mortgage, your monthly repayment could fall as well as rise.
Standard variable rate (SVR): This is the long-term rate of interest that mortgage lenders will be charged once their fixed or introductory discounted or tracker period ends. This is often much higher than the rate you could get during the initial deal term of a mortgage.
Fixed or variable
Offset: Probably the most complicated option, offset mortgages link your savings to your mortgage debt. With this type of mortgage you don’t earn interest on your savings - instead, your money is set against your mortgage so that you pay less interest on the debt. Available with fixed or variable rates, offsets are great for paying off your mortgage quickly. They also offer a bonus benefit for those in the higher or top tax brackets, as you don’t pay tax on your savings.
As the name suggests, with an interest only mortgage you only pay the interest on the loan. This can mean lower monthly repayments, but it also means that at the end of the mortgage term you’ll still have to pay back what you borrowed. You’ll need to have a plan in place to do this when you take out the mortgage.
What are mortgage rates?
The mortgage rate is the amount of interest you’ll be charged on the loan against the property. Mortgage rates vary based on several factors, including your deposit amount, the length of your mortgage term and whether you’re choosing a fixed-term deal or variable rate.
A fixed-term mortgage secures a guaranteed mortgage rate for an agreed term. This is typically two to five years, but some providers offer fixed-term mortgages for up to 15 years. The variable rate means your mortgage payments could go up or down, throughout your term, in line with the Bank of England base rate.
What impacts mortgage rates?
Mortgage rates are largely dependent on whether the Bank of England base rate goes up or down. Even if the rate changes during the next 12 months, if you have a fixed rate mortgage you won't be affected until the term ends.
Mortgage rates vs. mortgage fees?
While the mortgage rate tends to be the main number to look at when searching for a mortgage, you shouldn’t ignore the mortgage fees. The mortgage rate will determine your monthly outgoing for the next 25, 30 or even 35 years, but the mortgage fees are what you pay up front. They include valuation and arrangement fees, and legal expenses. These can add up to thousands of pounds, so you need to make sure that you can afford them.
What are the common fees when applying for a mortgage?
Advice fee: If you get help from a mortgage advisor, you may have to pay for their services. You won’t need to pay this if you get advice from our partner London & Country Mortgages.
Booking fee: This ‘reserves’ your loan as the application goes through. It’s worth noting that this will need to be paid upfront and won’t be refunded if you decide not to take out the mortgage.
Arrangement fee: This is what you pay your lender for setting up the mortgage. While a typical fee will be around £1,000, it could be as much as £2,000. You can pay upfront or add it onto your mortgage, but remember you’ll then be paying interest on it.
Valuation fee: There’s no set price for a valuation and some lenders offer them for free. They cover the lender surveying the property you want to buy to make sure it’s worth the amount you want to borrow.
Legal fees: Paid to a solicitor to cover all the legal paperwork, including Stamp Duty and search fees. Stamp duty is a tax paid by the buyer on the purchase price of a property and is related to the size of the mortgage.
What is a mortgage agreement in principle?
An Agreement in Principle is an offer of a mortgage from a provider. Most sellers will need you to have an Agreement in Principle before you make an offer on a house, as it shows you have the ability to borrow the amount needed to buy the property.
Once you’ve found the right property, you can then go back to your potential lender and finalise the terms of your mortgage.
To get an Agreement in Principle, you’ll need to provide a mortgage broker or potential lender with information about your income, outgoings and other financial details. Based on the information you give them and your credit score from a credit reference agency, they’ll calculate how much you’re eligible to borrow.
What is loan-to-value or LTV?
A loan-to-value ratio is used to show how much of your property’s total price is paid for by your mortgage. It’s usually expressed as a percentage. You can work it out by subtracting your deposit as a percentage from a property’s total value.
For example, a £20,000 deposit on a £100,000 home works out as 20%. Take 20% away from 100% and you’re left with an 80% LTV.
A higher LTV usually results in a mortgage with a higher interest rate because there’s more risk to the lender. If you can increase your deposit amount or buy a cheaper property in relation to your deposit, you could get a better mortgage rate.
How to get a first-time buyer mortgage
You’re generally expected to put down at least a 10% deposit on your first home and you should aim to get an Agreement in Principle before you start viewing properties.
You could even look into shared ownership deals to make things a little more affordable.
Our guide to first-time buyer mortgages helps you with all the basics so you can find the right deal for your budget.
What is mortgage protection insurance?
Mortgage protection insurance, also called mortgage payment protection insurance (MPPI), can cover the cost of your mortgage each month if you lose your job or can’t work because of illness. Many policies will pay out for a maximum of a year.
This safety net can be particularly useful if you’re self-employed and so aren’t eligible for sick pay from an employer.
What is APRC?
APRC stands for annual percentage rate of change (APRC). You’ll see this figure when mortgages are advertised and it’s something you can use to help you compare deals. It brings together the costs of the mortgage per year, including fees as well as interest. It’s calculated as if you were to keep the mortgage for the full term and not remortgage.
Mortgages often have an initial rate of interest that will last for a set period of time. Once that time is up, you’ll move to the lender’s standard variable rate if you don’t remortgage. The APRC takes this into account, showing you how varying rates will impact the mortgage in the long run.
When should I get a mortgage?
Before you start looking at properties, it’s a good idea to get a mortgage Agreement in Principle to help establish your budget.
You’ll need to provide your mortgage broker or lender with details about your finances to get one.
Agreements in Principle are normally valid for 90 days, which should give you plenty of time to find your perfect home. Once your offer on a property has been accepted, you can start the full mortgage application.
Which mortgage lenders do you compare?
You’ll find mortgage deals from across the market, including some of the biggest providers in the UK, including Barclays, HSBC, TSB Nationwide, Nat West and Santander, as well as other lenders like the Post Office. Some deals are available direct from the lender while others are only available through a mortgage broker, such as our trusted partner London & Country Mortgages Ltd (L&C)**.
How to compare mortgages
Before you begin your mortgage comparison, it’s good to have an idea of how much you might be able to borrow. Our mortgage calculator can help. It shows you what your monthly payments might be and how they change if you adjust the mortgage term – the length of the mortgage – and the interest rate.
Once you have an idea of what you can borrow and what property you can afford, you can start comparing mortgages. To do that, you’ll need to tell us:
- what type of mortgage you want
- the price of the property you want to buy (this can be an estimate)
- the deposit you have
- the length of the mortgage you want
Your results are arranged in order of monthly payment. Our easy-to-understand categories will also help you check rate types, arrangement fees and introductory rates.
If you need help, you can get free-free mortgage advice from our partners, London & Country Mortgages Ltd**.