Correct as of December 2023.
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.
What mortgage do I need?
Remortgaging is when you switch your existing mortgage to a new deal, using the same property as security. You can remortgage with the same lender or a different one. You could possibly find better mortgage deals with lower interest rates.
As the name suggests, a first-time buyer mortgage is aimed specifically at people buying a property in the UK for the first time. Our comparison tool can help you play around with deposits vs. borrowing amounts, to find a mortgage rate that can help you achieve your dream.
A buy-to-let mortgage is specifically designed for people who want to invest in a property, whether a house or flat, in order to rent it out to tenants. You’ll usually need a larger deposit than you would for a mortgage to buy your own home.
What are the different types of mortgages?
We’ll let you compare mortgages by type, including fixed, variable rate, offset or interest only mortgages.
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 mortgage – 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 charge 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. Although mortgage lenders roughly track the Bank of England base rate, they can decide to increase or decrease their SVR whenever they want.
Fixed or variable offset mortgage
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 quicker. 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 could 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 – for example, you could pay off the outstanding balance with savings or by selling your property.
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. Comparethemarket 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.
Don’t forget there’ll be other expenses, such as surveys, mortgage fees, legal costs and stamp duty (or its equivalent) – so make sure you take these into account when working out how much you can afford to spend on a property.
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.Mortgage 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.Remortgage calculator
Equity release calculator
Over 55 and want to release some of the value of your home? Get an idea of your options.Equity release calculator
|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.
What our expert says...
“The sharp incline in mortgage rates we’ve seen over the last twelve months is not something many households could have predicted. Many have seen their repayments skyrocket, with an overwhelming majority having to reduce their everyday spending to keep up with these repayments. With potentially more base rate rises to come, those who are still able to overpay on their mortgage may not feel as confident doing so later this year, and many borrowers may be considering alternative mortgage deals.”
- Alex Hasty, Consumer expert on insurance and finance
Why compare mortgages with Compare the Market?
Whether you’re buying your first home, remortgaging or buying a property to let, we’ll help you explore the options and find the right deal for you.
Compare mortgages in just 2 minutes
Get fee-free advice from our partners, London & Country Mortgages Ltd
 Correct as of December 2023.
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Help for first-time buyers
Getting on the property ladder isn’t always easy, but there are several schemes currently running to help first-time buyers.
The mortgage guarantee scheme
This government-backed scheme aims to make mortgages on homes up to £600,000 available to people with just a 5% deposit. It’s open to first-time buyers, as well as people who already own their own homes. Most of the high-street banks have signed up to the scheme.
The First Homes scheme
Offers new-build homes at a discount of 30% to 50% on the market price to first-time buyers in England. See if you’re eligible.
Help to Buy Equity Loan
Help to Buy equity loans are designed to help first-time buyers buy new-build homes. Under the scheme, the government lends buyers a percentage of the cost of the property.
Help to Buy Shared Ownership
Aimed at both first-time buyers and people who can’t afford to buy a home on the open market. It allows you to get a mortgage on a share of a property and pay rent on the rest.
Stamp duty relief
First-time buyers in England and Northern Ireland don’t have to pay stamp duty on the first £425,000 of properties costing £625,000 or less. In Scotland it’s on the first £175,000 for first-time buyers, £145,000 for everyone else. There’s no first-time buyer’s relief in Wales.
Our guide to first-time buyer mortgages helps you with all the basics so you can find the right deal for your budget.
Frequently asked questions
What is a guarantor mortgage?
A guarantor mortgage is a type of mortgage where another homeowner – usually a family member or close friend – agrees to cover the mortgage repayments if you’re unable to.
Guarantor mortgages can be a way to get mortgage approval if you’re a first-time buyer with a limited deposit or you have a poor credit history.
However, it’s a massive financial responsibility for both you and your chosen guarantor. If neither of you can afford to cover the repayments, you could both end up losing your homes. Guarantor mortgages are also unlikely to offer the best mortgage rates, so think carefully about whether you can afford the monthly repayments before deciding if it’s the best option for you.
What is the mortgage rate?
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-rate deal or variable rate.
A fixed-rate mortgage secures a guaranteed mortgage rate for an agreed term. A 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, if you have a fixed-rate mortgage you won’t be affected until the term ends.
How can I secure the best mortgage rates?
The best mortgage rates are typically offered to borrowers with larger deposits and the highest credit ratings. If you want to secure a decent rate, it may well be worth building your credit score before you consider applying for a mortgage.
There are a few ways to help improve your credit rating, including:
- Registering on the electoral roll.
- Checking your credit report for any errors or out-of-date info.
- Always paying your bills on time.
- Cancelling any unused accounts and cards.
- Avoiding applying for different types of credit over a short period of time.
What are the common fees when applying for a mortgage?
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. These are the costs you need to pay up front.
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 unrelated 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. It’s valid for a limited time – usually 90 days.
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 (LTV) 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.
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 so aren’t eligible for sick pay from an employer.
What other types of insurance might I need for a mortgage?
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.
How can I improve my chances of getting the best mortgage deal?
No one likes to be rejected, so you’ll want to make sure you’re as prepared as possible to boost your chances of mortgage approval:
- Check your credit file and take time to build up your credit score.
- Save enough for a decent deposit – the larger your deposit, and the lower your LTV, the more chance you’ll have of securing a good mortgage deal with a better rate of interest.
- Choose your property wisely – mortgage lenders can be prickly when it comes to non-standard homes and flats with leasehold issues which may be difficult to sell on.
- Get your paperwork together – lenders want to see proof of income – usually three months’ worth of bank statements, payslips and your latest P60, or tax returns for the last two or three years if you’re self-employed.
- Be careful with debt – ideally, try and pay off large outstanding debts and avoid applying for any type of credit just before you apply for a mortgage.
How much deposit do I need for a mortgage?
Thanks to the Mortgage Guarantee Scheme it’s possible to get a mortgage with just 5% deposit from participating lenders for a property with a purchase price of £600,000 or less. However, this does mean your options are limited, and the scheme is only available until 31 December 2023.
Most lenders typically want a 10% to 20% deposit, with 20% giving you access to the best mortgage deals.
Find out more about saving for a mortgage deposit.
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, NatWest and Santander, as well as other lenders such as 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)**.
The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.
A guide to mortgages
There’s a lot to know about mortgages. Understand how to get one, how they work and the mortgage options available with the help of our guides.