Speak to an adviser
Speak to a fee-free expert mortgage adviser from our partner L&C. Open 7 days a week – until 8pm weekdays. Call free from mobile or landline.
We know that deciding to take out a mortgage is a big financial commitment – something that you shouldn’t rush into without exploring your available options. That’s why we have designed this page to help you cut through the industry jargon to better understand how mortgages work and how you should compare the different deals that are out there.
How can we help?
Online mortgage finder
Complete our form to access personalised information on mortgages to suit your particular needs.
Browse mortgage rates
Fast and simple comparison of today’s best rates and overview of mortgage options from a range of UK lenders.
Handy tools
How much can I borrow?
Estimate the size of mortgage that will be available to you based on factors like your income and deposit.
How much will it cost?
Estimate your monthly repayments in seconds from your mortgage amount, interest rate and duration.
How much stamp duty will I pay?
Buying a property over £125,000? Calculate how much you will pay in stamp duty with our handy calculator.
Compare mortgage providers
Updated April 23rd, 2019
Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.The finder.com mortgage service is provided by London & Country Mortgages (L&C). Beazer House, Lower Bristol Road, Bath BA2 3BA.
L&C are authorised and regulated by the Financial Conduct Authority (reg no. 143002). Please note the FCA does not regulate most Buy to Let mortgages.
L&C are authorised and regulated by the Financial Conduct Authority (reg no. 143002). Please note the FCA does not regulate most Buy to Let mortgages.
How do mortgages work?
Whether you’re buying a house, unit or apartment, most of us don’t have enough money tucked away to cover the full purchase price. In order to get the full amount needed to buy a property, we need to borrow money through a mortgage.
A mortgage is an arrangement where you borrow money from a lender to buy a property, whether as a home or investment. It usually lasts for between 25 – 35 years.
In exchange for allowing you to borrow this money, your lender will charge you interest. This can be either fixed at a certain rate, or variable.
You’ll usually pay your loan off in instalments known as repayments. These are usually required every month.
A mortgage can also be known as a home loan or as home finance.
The UK’s largest mortgage lenders by market share
| Mortgage lender | Market share |
|---|---|
| Lloyds Banking Group | 15.6% |
| Nationwide Building Society | 14.4% |
| Royal Bank of Scotland | 12.9% |
| Santander UK | 10.4% |
| Barclays | 8.4% |
| HSBC Bank | 6.4% |
| Coventry Building Society | 3.7% |
| Virgin Money | 3.4% |
| Yorkshire Building Society | 2.9% |
| TSB | 2.7% |
These figures are taken from UK Finance (formerly the Council of Mortgage Lenders) and are based on gross lending amounts.
Best mortgage rates
Finding the best mortgage rate is tricky because many deals start with a low, fixed rate which then becomes a higher, variable rate after a set period of time – typically between 2 and 10 years. This means you can end up paying more than you expected if you end up on the variable rate. Our table shows a list of mortgage providers offering repayment mortgages on a property worth £250,000 with a mortgage amount of £200,000 over a 25 year period. The initial rates shown are set to up to 2 years fixed and after that the variable rate begins. These rates are based on an 80% loan-to-value(LTV) ratio. Explore further and find the best rate including total amount payable at London and Country.
| Lender | Rate | Reverts to |
|---|---|---|
| Hanley Economic Building Society | 1.55% | 5.44% |
| Sainsbury’s Bank | 1.64% | 4.49% |
| TSB | 1.64% | 4.24% |
| Digital Mortgages | 1.64% | 4.00% |
| Barclays | 1.65% | 4.24% |
| Clydesdale Bank | 1.69% | 5.20% |
| Accord Mortgages | 1.72% | 4.99% |
| Halifax | 1.73% | 4.24% |
| Nationwide | 1.74% | 4.24% |
| Natwest | 1.74% | 4.24% |
| The Nottingham Building Society | 1.75% | 5.74% |
These rates were taken on the 18 December 2018 from L&C.
What types of mortgages are on offer
You can boil down UK mortgages into the following types:
Fixed rates
Unlike a variable rate home loan where repayments move up and down, fixed rate repayments remain unchanged for a set period. This means that for the length of your fixed rate term — usually between one and five years, but sometimes as great as 10 or even 15 years — you’ll know what your repayments will be.
Standard variable rates
A variable rate home loan is a home loan product which has an interest rate which fluctuates up or down over time as your lender sees fit. Unlike a fixed rate home loan where the rate is locked in for a fixed term, the interest rate of a variable rate mortgage moves up and down in accordance with market changes.
Tracker mortgages
Tracker mortgages move in line with a nominated interest rate which is usually the Bank of England base rate. The actual mortgage rate you pay will be a set by your lender at an interest rate above or below the base rate. When base rate goes up and down, your mortgage rate will go up and down by the same amount.
Discount rate mortgages
A discount mortgage works by setting a discount on a lenders standard variable rate (SVR). This means the interest rates can go both up or down in line with the SVR.
Interest only
Standard home loans have repayments that include both the interest and a small proportion of the capital. If you remove this capital portion from the equation, you can reduce the amount you make in repayments each month. This can be good for some borrowers, including investors and those building a property, but there is an added risk with this type of loan as your loan amount doesn’t reduce, meaning you will still have to pay the whole capital off at the end of the term.
Offset mortgages
Offset mortgages are linked up to your savings account and can help to reduce your interest payments. Any money deposited into the account offsets interest on your mortgage. For example, if you have a mortgage of £100,000 and savings of £25,000, your mortgage interest is calculated on £75,000 for that month.
This cuts the amount of interest you pay but the mortgage rate is likely to be more expensive than on other deals. You can still access your savings if you need to but the more you offset, the quicker you’ll repay your mortgage.
Capped rate mortgages
This is a type of variable rate mortgage but one with a limit or cap on how high your interest rate can rise. So you can benefit from low interest rates but also enjoy the comfort of knowing that your interest rates will never exceed a certain level.
Cashback mortgages
When you take out this kind of mortgage you also receive some money back. This is normally a percentage of the loan.
Flexible mortgages
This option is available on many other types of mortgage and it allows you some flexibility when making repayments. You can choose to pay more when you can afford it and if you have already overpaid then you can pay less or take a payment holiday. These types of mortgages tend to have higher interest rates than other deals.
95% and 100% mortgages
These types of mortgages are designed for people that either have no deposit or are struggling to save a significant deposit. Loan-to-value rates of 95% or 100% typically incur higher interest rates. Although they were previously widely offered, 100% mortgages fell out of favour after the financial crisis, and now only tend to be offered when a family member is able and willing to provide a guarantee secured against their own residential property.
Buy to let mortgages
Buy to let mortgages are for people who want to buy a property and rent it out rather than live in it themselves. The amount you can borrow is at least partly based on the amount of rent you expect to receive.
Struggling to understand mortgage jargon?
We know that sometimes it seems as though the financial world operates in a different language altogether making it hard to understand what you’re getting into when applying for a mortgage. So to help you out, we have created a mortgage A-Z to simplify the terms your most likely to come across in your application.
How much does it cost?
1. Upfront fees
-
Mortgage arrangement fee. This is the fee that your mortgage lender charges to set up
your mortgage. - Product fee. Many lenders will charge you a product fee which is the cost of choosing a specific mortgage.
- Valuation fee. This is a fee charged by your mortgage lender for them to carry out valuation of the property you would like to purchase the mortgage for.
- Legal fees. A legal professional will need to look over your application to make sure it’s compliant.
- Stamp duty. If your property costs over £125,000 you’ll have to pay stamp duty, which is a certain type of land tax. You’ll usually have to pay this tax as an upfront fee within 30 days of settlement.
your mortgage.2. Ongoing fees
- Repayments. The biggest cost of a mortgage is in the regular repayments you have to make on it. Your repayment amount is set by your lender and takes into account the interest rate, how often you’ll be repaying and the length of the loan.
3. Exit fees
- Early Repayment Charge. If you repay your mortgage early or overpay more than your overpayment allowance some mortgage providers will charge you an early repayment fee.
- Redemption administration fee. This is a fee charged by your lender in order to close your mortgage at the end of the term.
How to prepare when applying for a mortgage?
- Make sure your credit report is in order. You can get a copy of your credit report online. Its a good idea to make sure your address history is accurate and it also might help to be registered on the Electoral Roll at your main address.
- Ensure your ID and address documents are up to date. Some mortgage lenders will ask you to provide proof of ID or address to satisfy money laundering requirements and these must be the original document, not a copy, and be current and valid.
- Where is your deposit coming from? All lenders will want to see where your deposit is coming from and whether it is a gift or part of your savings. For example, if the money is coming from your savings account then you will be required to show bank statements as evidence.
- Have all your income proof ready. Your lender will want to know how much you earn, so it is a good idea to have your income proof readily available for your application. You may be required to present your latest 3 months payslips/bank statements, or your latest P60. The documents you will need to supply depends on the requirements of the specific lender.
- Check your solicitors are on the lender’s panel. Lenders these days are extra careful about which lawyers you are using to target mortgage fraud. Ask your solicitor if they can work with most lenders, make sure they are a reputable firm.
- Are you getting a joint loan? Think about how strong your relationship is with the other party. Changes to your relationship could make it hard if one party wishes to sell their part of the property.
- What are your plans for the property over the next few years? Match your mortgage to your future plans. For example, avoid taking out a fixed rate loan if you plan to sell the property shortly after buying it. Many fixed rate mortgages charge a penalty if you pay them off before the end of the set period which can be expensive.
- Are you eligible for the loan? Borrowers generally need to be over 18 years of age. There are other requirements too, but these depend on the lender. Some will want you to have a good credit rating. Others might not allow you to buy inner city apartments. Always read these before applying.
How do I find the best mortgage deals of 2019?
- Decide on a loan type. First, decide whether a fixed rate or variable rate mortgage is more suited to your plans and budget. This is also a good time to find out what your credit score is and know what loans are available to you.
- Compare different lenders for different loans. Compare what different banks and lenders are offering for your chosen loan type and down payment. It is also important to always get more than one quote when looking for a mortgage. This will ensure you get a good mix of options from different types of lenders.
- Ask for a Key Facts Illustration. A lender must give you a loan estimate by law. This will show you interest rates, repayment costs and closing costs for your potential mortgage. Some lenders also have a mortgage calculator feature on their website where you can receive a quick quote.
- Repeat until you find a loan you want. It’s normal to ask for loan estimates from more than one lender until you find a loan you’re happy with.
London and Country Mortgage Experts
L&C is a specialist broker offering mortgage comparison & free advice.
- Compare 80 mortgage deals
- Fee FREE mortgage advice
- Personal customer service from start to finish
- Open 7 days a week
The finder.com mortgage service is provided by London & Country Mortgages (L&C). Beazer House, Lower Bristol Road, Bath BA2 3BA.
L&C are authorised and regulated by the Financial Conduct Authority (reg no. 143002). Please note the FCA does not regulate most Buy to Let mortgages.
L&C are authorised and regulated by the Financial Conduct Authority (reg no. 143002). Please note the FCA does not regulate most Buy to Let mortgages.
I’ve used London and Country Mortgages three times so far and always very successfully.
One word… Trust. I have confidence in your advice, something often missing with financial services.
I can’t praise L&C enough. They listened to my needs, understood and sought the best offer for me and my partner.
*Disclaimer: The offers compared on this page are chosen from a range of products finder has access to track details from and is not representative of all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The use of terms ‘Best’, ‘Top’, ‘Cheap’ including variations, are not product ratings and are subject to our terms of use. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
Related Posts
Ask an Expert
Are there Lenders who offer mortgages internationally/worldwide and at competitive interest rates and regardless of your country of residence?
I’d really be interested to know i can access mortgage package from global Organisations with favorabla repayment terms.
Hi Henry,
Thanks for getting in touch with finder. I hope all is well with you. :)
As of now, we currently don’t have a list of lenders who offer a mortgage on an international level. However, a quick search on the Internet should give you a list.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
HI, I’m currently working aboard and therefore have rented out my uk home. I don’t make any money as the rent only just covers the mortgage. With Brexit is it going to be better to sell? I’m worried if the house prices go down i’ll be in negative equity.
Hi Sarah,
Thanks for getting in touch with finder. I hope all is well with you. :)
It would be difficult to give you a personalised answer since I’m not completely aware of your situation. However, what you can do is to research the market. According to the trend, housing price growth in the UK has slowed since the EU referendum in June 2016, with considerable variation among regions.
Please seek professional and expert advice. Acquire as much information as possible before making a decision.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Hi,does anyone lend money to buy a house even though you work overseas
Hi John,
It’s possible that there are lenders who accept applications from residents working overseas, however, we are yet to have a dedicated page for it.
You may opt to reach out to the lenders featured on this page to consult on what options they can offer you based on your personal circumstances.
Please ensure to read the details, as well as the relevant Product Disclosure Statements/ Terms and Conditions of the option before making a decision and consider whether the product is right for you.
Best,
Maria
My partner and I want to buy a house together but as my credit rating is poor we decided it best for him to apply for a mortgage on his own. Can I get my name put on the deeds as I will be paying half the mortgage?
Hello Linda,
Thank you for your inquiry. Yes, any transfer would have to be with the consent of the mortgage lender. Both of you and the lender will enter in a mortgage deed, to set out the terms. Your lender will run through a similar process to a new application whereby they will check affordability, credit history and identity of both applicants prior to agreeing to add someone on to the mortgage. If you get an approval, a solicitor will be able to advise you on the most suitable way to set the property ownership (tenants in common or joint ownership) and of any potential tax liabilities (e.g. stamp duty) that may arise.
Please bear in mind that, changing the mortgage to a joint basis or taking joint bank account, will make your partner’s credit become associated with your own. You can learn more about the process and the forms needed on this page.
Hope this helps.
Cheers,
Jonathan