Mortgage Rate Comparison

The best deals from the best providers

Understanding how to get the best mortgage rates can be quite confusing, especially for first-time buyers. Mortgage rates are quite complex, as there are many variables considered, which can cause mortgage rates to increase or decrease. Comparison sites help with this, but they can only go so far. Many lenders and brokers offer great rates, but choose not to appear on expensive comparison sites.

Fill out our mortgage comparison form and we will email you with the best rates.

Why Choose Us

Friends Capital is one of the UK’s leading brokers with over 30 years experience of finding the best possible policy to suit your needs at the lowest possible price. We search the market with all the best providers so that you don’t have to.

  • We work with all of the UK’s top insurance companies and financial institutions, meaning we represent the very best the market has to offer.
  • We will explain the pros and cons of different products and make sure that the solution you end up with will be the right one for you.
  • We guarantee to treat everyone with total understanding and empathy of your needs and circumstances. 
  • We do not prejudice anyone and work hard to bring you the best possible deal and outcome, regardless of your situation.
  • Put your trust in Friends Capital and contact us today for all of your financial and protection needs.

Here is some useful information about how mortgage rates are calculated to help you understand how it works and get the best possible deal. 

 

House Purchase FAQs

Mortgage and loan interest rates are calculated based on the bank of Englands base rate, and the average rate at which banks borrow money from each other (LIBOR). They will then look into economic indicators, such as the housing market, unemployment rates and repossessions etc. 

 

When buying a property, all lenders require a deposit which is a percentage of the value. This deposit is one of the two assurances the lender requests, that proves you are able to cover repayments. The percentage of your deposit will determine the LTV percentage you require to meet 100% of the property value. Therefore, a greater deposit means a lower LTV, which results in a better mortgage rate.  

Similarly, the longer the mortgage term, the lower the interest rate. It’s important to be aware however, while a longer-term reduces monthly repayments, the overall total to pay will increase.

Example: A buyer with a 10% deposit applies for a 90% LTV mortgage over 25 years. If they want a better mortgage rate they could increase the deposit to 20% and ask for a 80% LTV mortgage, or they can extend the term of their mortgage to 30.  

 

Credit score

The other assurance lenders request is that named mortgage holders submit to a credit check. This informs them about your current financial situation and spending habits so they can determine the most suitable mortgage product. Naturally, those with a better credit rating will receive better mortgage rates, as they have shown the bank they are reliable. Most lenders also take other personal details such as demographics and proof of employment into consideration. 

Learn more about bad credit mortgages.

 

Fixed Rate mortgages

This is as simple as it sounds. The lender will fix the mortgage rate temporarily for 2,3 or 5 years regardless of whether interest rates increase or decrease.

  • Pro:
    • Stability -Mortgage costs and monthly payments are guaranteed for an agreed time frame
    • Payments will not increase, no matter how high the rate
  • Cons:
    • Will not be paying less if the mortgage rate decreases
    • Fees will apply to when leaving the agreed term early
    • Usually higher rates than variable mortgage

Variable rate mortgages

This means that the interest rate you pay can change on a monthly basis, meaning that when interest rates increase or decrease, your repayments also move in line. There are 3 types of variable mortgages:

Tracker mortgages – The rate moves inline with the Bank of England base rate

  • Pro:
    • These are only around 1% more than the BoE base rate and the economy is the only influencing Only the economy will affect your interest rate.
  • Cons:
    • You cannot guarantee how much you will be paying overall or your monthly costs and you could find yourself locked in.

Standard variable rate mortgages (SVRs) – The rate set by the lender and is the default mortgage rate following the conclusion of a term.

  • Pro:
    • No early repayment charge
  • Cons:
    • Usually higher than other mortgage types

Discount rate mortgages – A discounted SVR mortgage

  • Pro:
    • Could be the cheapest rate type
  • Cons:
    • There is no guarantee that a lender will lower rates based on economy, however they can increase them.

With an interest only mortgage, you pay only the interest that applies to your mortgage deal during the term. Your monthly payment does not reduce the debt on the amount borrowed, as this is paid back in full at the end of the term. To be eligible for this type of mortgage, you need to have a solid savings plan to prove you will be able to pay off the debt.

  • Pros
    • Lower monthly cost reduces the chances of getting into arrears
    • Can take out an interest only loan for a couple of years before moving onto a fixed or repayment mortgage
    • Overpayments come off the total cost of the debt
  • Cons
    • Interest only mortgages are hard to get
    • You may have to sell the property at the end of the term if you cannot repay the debt in full
    • Higher cost overall as the amount borrowed will not be reducing and neither will your interest rate
    • If house prices are lower at the end of your mortgage term, you will be required to finance the gap

This type of mortgage might suit those who are self employed and likely to earn more in some months and less in others. For months when earnings are not likely to be as high, the repayments are more affordable, and in months when earnings are high, they can continue to chip away at their debt.

There can also be tax advantages for buy-to-let investors.

Service

Friends Capital work with all of the UK’s top insurance companies and financial institutions meaning we represent the very best the market has to offer but brought to you with independent and impartial advice.

We will explain the pros and cons of different products and make sure that the solution you end up with will be the right one for you.

Trust

Our reputation is our bond. Friends Capital guarantee to deal with everyone with total understanding and empathy of your needs and circumstances. We do not prejudice anyone and work hard to bring you the best possible deal and outcome, regardless of your situation.

Put your trust in Friends Capital and contact us today for all of your financial and protection needs.

Value

Friends Capital is one of the UK’s leading brokers with over 30 years experience of finding the best possible policy to suit your needs at the lowest possible price.

We search the market with all the best providers so that you don’t have to.

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