Choosing a mortgage can feel daunting, especially for first-time buyers unfamiliar with the process or existing homeowners facing the prospect of higher bills if mortgage rates are higher than when they bought their property.
Borrowers will be keen to find the cheapest possible option that meets their needs but may also have preferences over lender or struggle to meet requirements at some banks.
After years of rock-bottom rates, mortgage rates have been unstable over the past couple of years, so it is important to research what the options are and what will work best for you and your financial situation.
Here, Telegraph Money reveals today’s top residential mortgage rates, whether you’re buying a new home or remortgaging, for those who prefer to fix or want a variable-rate deal. These rates refresh every day, from Tuesday to Saturday.
If you are a landlord, here are the best buy-to-let mortgage rates.
These Best Buy tables show the best mortgage rates widely available in the market. This means certain accounts are excluded, including those that are available only to local or existing customers, buyers using government support schemes, properties with high energy ratings or clients of specific brokers.
The data is provided by mortgage lenders and verified by Koodoo, the trading name of Mortgage Power Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 845978) on a non-advised basis. The tables update daily between Tuesday and Saturday.
Rates are representative for a £150,000 loan value, £275,000 property value and 25-year term. Try Koodoo’s comparison tool to see if better deals are available for your circumstances.
The information in this article is intended for information purposes and should not be taken as endorsement or advice. Your property may be repossessed if you do not keep up repayments on your mortgage.
These “purchase” rates are for those buying a new property, such as a first-time buyer or a second stepper upgrading to a family home. Those looking for a new deal in their current home need a “remortgage” deal and we show the best rates further below.
Homeowners who need to remortgage their home will be offered different rates than first-time buyers or home movers who need a “purchase” mortgage. These are the best deals for owners staying put.
Chris Sykes, mortgage consultant for Private Finance, said: “It’s important, especially for first-time buyers, to understand how mortgage rates are tiered.” Certain factors will affect the rates available to you. For example, workers who are self-employed or receive much of their income as bonuses may not be able to access the best rates.
The size of your deposit also makes a huge difference to the rates lenders will offer you. “Generally, with every additional 5pc deposit that you put forward, you get a better rate. The longer the mortgage takes, the lower your monthly payments will be. But ask yourself if you want to be paying this in your 70s,” Mr Sykes said.
If you want flexibility and don’t want to lock in a long-term rate – for example, if you plan to sell up or believe interest rates will fall – then a two-year fixed-rate mortgage might be for you. If you want to protect yourself from the turbulence of interest rates for longer, or you think they might rise, then guaranteeing a rate for five or even 10 years could be a better option.
A variable-rate mortgage might suit you if your plans don’t suit committing to a fixed-term deal (perhaps you’re planning to move house soon, for example), or if you think you could get a cheaper deal than fixes can offer – for example, opting for a variable tracker mortgage ahead of Bank Rate cuts.
Alex Ogario, of Knight Frank, said: “Compared with a two-year fixed rate, a five-year fixed product will tie you in for longer. However, you’ve secured a rate for that time. So if you want to have more stability, do not need more flexibility and don’t want to be exposed to interest rate volatility for this period, then it might be a good idea to lock in a rate now and not have the risk for the next five years.
“However, shorter and longer fixed terms are available, so finding a suitable option that’s tailored to your specific needs should be the aim.
“The choice between a two-year and five-year fixed rate often depends on the person’s risk appetite. Some people don’t want to be exposed to volatility but then others want to keep options open and be able to change course if needed. There is no one-size-fits-all option here and it is also determined by other variables, such as requirements for flexibility and future expectations of interest rate movements.”
Mortgage brokers can help you get a better mortgage as they often have access to cheaper deals than you may be able to find yourself.
They can also alleviate some of the stress involved with buying a house. If you’re self-employed or are struggling to find a lender who will approve your application, it might be a good idea to speak to a broker.
Mr Ogario said: “With the volatility and uncertainty that we’re seeing in the market, people should be doing their due diligence more than ever and taking advice from experienced and qualified experts.
“Don’t go to the shop without your wallet, which means don’t find a property without having done any research on finance. Often our most successful and sophisticated clients from a financial perspective are the ones who ask the most questions.”
There is no specific minimum salary to get a mortgage, but how much you earn affects how much you can borrow, as lenders want to ensure you can afford the repayments. As a general rule of thumb, lenders will allow you to borrow up to 4.5 times your annual income, although some will be more generous.
Remember that income is not the only factor taken into consideration; your deposit and outgoings also make a difference.