Why Compare Mortgage Rates?
Whether you’re remortgaging to a better deal, moving to a new property, or buying your first home, comparing mortgages can help you find the best deal for your circumstances. Different lenders have different fees, interest rates, mortgage terms and early repayment charges, so comparing can save you money and help you find the right mortgage for you. You can use our different best buys to look at different mortgage deals and lenders.
If you’re remortgaging, then you can use our mortgage comparison calculator below to see how your monthly payments will change when you switch to a new deal.
How Much Could I Save by Changing My Mortgage Rate?
If you’ve had the same mortgage rate since you bought your home, you probably could save a large chunk of money by changing rates.
Use this mortgage comparison calculator to see how your current rate compares to other mortgage deals on the market, so you can estimate your potential mortgage savings.
You can also learn more about switching rates and remortgaging in our remortgaging guide.
Comparison Calculator
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The purpose of this mortgage comparison calculator is to compare the monthly repayment rates of 2 different mortgage schemes and not to evaluate the benefits of the comparative schemes.
Please note that this comparison tool does not consider any early repayment charges or additional costs which may be incurred by remortgaging your property.
Our mortgage savings calculator is intended purely to give you a quick estimate of what you may be able to save. To get a more detailed view of how different mortgages compare, speak to one of our expert advisers today.
The loan saving mortgage calculator is a great way to start – but it’s certainly not a definitive answer – and if it’s not the answer you’re looking for, our experts can review your full situation and advise on the most appropriate course of action, including products you might not previously have considered.
What Are the Different Types of Mortgages?
There are several different mortgage types available, including the following.
Fixed Rate
With a fixed rate mortgage, the interest rate remains unchanged for a set period, usually 2 - 5 years. As it's fixed, it’s not affected by market fluctuations or Bank of England Base Rate rises. This means you’ll know exactly how much your mortgage payments will be each month until the fixed period expires.
Fixed rate mortgages are ideal if you’re looking for security and want to budget accurately at the start of your mortgage. However, once locked into the initial period on a fixed rate mortgage, you may find it difficult to switch again before the fixed deal ends without facing significant penalties. You'll also miss out on any falls in interest rates but will be protected from rate rises.
Variable Tracker Rate
With a variable rate mortgage, the interest rate can change to a lower or higher amount. At no point is a rate “locked in” as with a fixed rate mortgage, so how much you pay each month can vary.
The most common type of variable rate mortgage is a tracker rate. A tracker rate is affected by the Bank of England’s Base Rate. A tracker rate mortgage may benefit those who don’t want to be tied into their rate because of ERCs but want the flexibility to switch mortgages or move home in the near future.
Discount Rate
Discount mortgages are a reduced version of the lender’s SVR (standard variable rate) mortgage. The discount amount is set a certain amount below the SVR, which means the rate you pay varies depending on whether the lender increases or decreases the SVR. Most discount mortgages are only available to borrowers for an introductory period.
After the period ends, the lender will switch you to their SVR.
Offset Mortgage
Offset mortgages let you link your mortgage with your savings to reduce the interest you pay. This type of mortgage works by offsetting the value of your savings against your mortgage loan amount, so you’ll only be charged interest on what is left over.
As the mortgage rate is applied to a lower amount, how much interest you pay every month will also be lower. Some lenders will let you either reduce your monthly repayments for the duration of your loan or keep the same payment amount but pay it over a shorter period. When you offset your savings against your mortgage, you cannot earn interest on them. But you also don’t pay tax on them. This is a popular type of mortgage if you're in a high income bracket and have ample savings.
Interest-Only Mortgage
Interest-only mortgages mean that you pay the interest on the mortgage each month but make no payment toward the capital you've borrowed. The mortgage loan is paid off at the end of the term, so you’ll need to ensure you have sufficient funds to repay the entire amount when the time comes.
With an interest-only mortgage, your monthly repayments will be less than with most other types of mortgage. But as you’ll only pay the interest each month, and none of the capital, an interest-only mortgage will generally cost you more than a standard repayment mortgage.
Who Is Offering the Best Mortgage Rates in the UK?
While finding the best mortgage rates among the many mortgage deals available isn’t always easy, a mortgage rate comparison calculator can help you compare other mortgage rates to what you’re currently paying.
First, try our remortgage best buys to search for potentially suitable deals. Once you have a few in mind, then you enter them into our comparison calculator to see your potential savings.
Will Mortgage Rates Go Down in 2023 in the UK?
It’s impossible to foresee where rates will be later this year. It’s always worth speaking with a broker who can review your circumstances and find the best deal on the market for your current and future needs. Call us on 0330 433 2927.