Whether it’s achieving the dream of owning your own home, moving to a new place with extra space, or simply looking to save on one of your most expensive bills, we can help you find the right mortgage for you.
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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 government has agreed with mortgage lenders to offer repayment holidays to households with financial problems because of the coronavirus pandemic.
What mortgage do I need?
First time buyer: A first-time buyer mortgage is aimed specifically at those who are 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. Lower deposits mean that you can get a mortgage with 5% deposit of the property value, which is known as a 95% mortgage.
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.
Second 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 been 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)** mortgages 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 the mortgage tables and comparing providers’ rates, it’s important to have an indication of what you can afford and how likely it is you’ll qualify for what you’re hoping to borrow. We have a basic calculator to help you with this.
Basic mortgage calculator: a quick and easy way to help you work out how much you could borrow. Remember, the actual amount you could borrow will depend on a number of factors, including the deposit you have, any outstanding credit commitments and your monthly outgoings.
|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
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, although 95% mortgages are available. The larger your deposit, the less you need to borrow, which will make your mortgage cheaper.
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
Fixed rate: With this type of mortgage, the interest on your mortgage is fixed at a set interest rate for an agreed period of time, varying from one to 10 years. This type of mortgage could be good if you need to stick to a budget.
Variable rate mortgages
Tracker: This type of mortgage has an interest rate that is tied to the Bank of England base rate. The mortgage changes with the base rate. Most trackers have terms of two or five years, but you can get lifetime (also known as term) tracker mortgages.
Discount: Another type of variable mortgage, discount mortgages differ from trackers in that they are not tied to the Bank of England base rate. Instead, they are linked to the lender’s standard variable rate (SVR), normally over one to five years. Discount mortgages could be great as monthly repayments could fall as well as rise, but are a little more complex and unpredictable compared to trackers.
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.
What are mortgage rates?
The mortgage rate is the amount of interest you’ll be charged for on the loan against the property. Mortgage rates vary based on several factors, including your deposit amount, the length of your mortgage term, along with 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. This is 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. Of course, even if they move during the next 12 months, if you have a 'fixed' 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 by any means. The mortgage rate will determine your monthly outgoing for the next 25, 30 or even 35 years, but the mortgage fees are what you’ll be paying up front. These costs range from valuation fees, as well as costs for arrangement and legal expenses. These can run up into the thousands, so you need to make sure that you can afford it all responsibly.
What are the common fees when applying for a mortgage?
Advice fee: If you seek 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 won’t be refunded if you decide not to take out the mortgage and will need to be paid upfront.
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 wish to borrow.
A valuation is to ensure that if you can’t keep up with your monthly repayments, when the lender repossesses the property that they can get a good price for it when it is sold.
Legal fees: These cover a solicitor to do all of the legal paperwork. They include 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 your mortgage.
What is a mortgage agreement in principle?
An agreement in principle is an offer of a mortgage from a provider. In order to make an offer on a house, most sellers will require you to have an agreement in principle, as it confirms that you have the ability to borrow the required amount to buy the property. Once you’ve found the right property, you can then return to your potential lender and finalise the terms.
To secure 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 provide them, they will calculate how much you’re eligible to borrow.
Which mortgage lenders do we compare?
When looking for the right mortgage deal for you, it’s important to have plenty of choice. That’s why, at Compare the Market, we bring you a great selection of mortgage providers. You’ll find mortgage deals from some of the biggest providers in the UK, including big banks such as Barclays, HSBC, TSB and Santander, to other lenders such as the Post Office.
How to compare mortgages
We can help you compare mortgages from some of the market’s leading financial providers, to help you find a great mortgage rate. 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.