Mortgage Interest Rates

If you’re hoping to get set up with a repayment mortgage when buying a property, it’s crucial to have a complete understanding of interest rates if you want to compare the best deals.

The table below offers a snapshot of the best mortgage rates available at the moment. A mortgage broker will be able to offer guidance on how you can take steps to guarantee you end up with the lowest rates available for your house purchase.

The rates quoted above were correct at the time of writing (June 2023) and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time. 

Keep reading for a comprehensive explanation of UK mortgage interest rates, or click on a link below to jump straight to a section…

What is a good mortgage interest rate right now?

This will depend entirely on your circumstances and what rates you can qualify for. But to give you an idea, the average rate on a 2-year fixed-rate mortgage at the time of writing (June 2023) recently topped 6%.

However, that isn’t to say that the right mortgage broker cannot get you a significantly lower rate than this, depending on your deposit amount and other factors.

How to compare the best mortgage interest rates

Interest rates tables are useful in giving you a brief illustration of what’s currently available. However, the best way to compare all the mortgage deals and rates available on the market – including those not always available in the public domain – is to speak with a mortgage broker.

An experienced mortgage broker will be able to help with:

• Finding the best mortgage deal with the lowest rates for your specific circumstances and financial situation.
• Saving you lots of time by identifying the lender’s who can offer the best terms and understand what their eligibility requirements are
• Preparing all the necessary documentation evidence and information needed for your mortgage application, giving you the best chance of success – first time!

If you want an experienced and knowledgeable mortgage broker to carry out a complete comparison of mortgage offers based on your circumstances, just make an enquiry, and we’ll introduce you to one for free.

Eligibility factors that determine how interest rates work

When trying to find the best mortgage deal, it’s worth understanding what impacts the interest rates you can access – both directly and indirectly.

Keep in mind that an experienced mortgage broker will be able to find ways of getting you the cheapest rates available based on your situation.

But to give you somewhere to start, here’s a thorough explanation of the direct factors impacting whether you might qualify for today’s best mortgage rates:

• Your deposit: how much you put down as a deposit will often impact your rates. Some lenders will give you access to the lowest rates if you use at least 40% and the next best rates with 25%. A larger deposit reduces the risk for lenders, which is why they sometimes offer better rates
• Credit history: before applying for mortgages, it’s well worth downloading all your credit reports and getting your broker to help evaluate your scores. Your credit profile can make a big difference if you want the best residential mortgage rates. That being said, if you have adverse credit, a bad credit broker will still be able to find you a competitive mortgage – perhaps introducing you to a specific bad credit lender.

Indirect factors

In addition to the criteria outlined above, there’s also an array of other factors which could indirectly affect your ability to qualify for the best mortgage rates available – mainly because they could limit the number of lenders willing to consider your application, such as:

• Whether you’re a first-time buyer or existing homeowner
• How much you borrow: Some lenders have minimum and maximum loan amounts and use different income multiples
• Type of property: whether you’re planning to buy a new-build property, an apartment/flat, or getting a freehold or leasehold mortgage can all indirectly impact your rate
• Source of income: whether you’re an employee or self-employed could indirectly affect your ability to find the cheapest mortgage rates by potentially reducing the number of lenders willing to consider your application
• Term length: a shorter term length won’t directly impact your interest rate. But it could reduce the number of lenders available to you
• Fixed or variable rate: Depending on which type of deal you want will restrict your choice to those lenders willing to offer those specific deals

How repayment mortgage rates compare to other mortgage types

A repayment mortgage will be the most common option for homebuyers, but other types of mortgages available tend to come with different interest rates.

Here are some of the leading mortgage products to be aware of:

• Interest-only mortgage: with this type of mortgage, you’ll likely find that the monthly payments are lower (because you’ll only be paying the interest). Still, the interest rate itself can sometimes be higher than with a repayment mortgage because some lenders deem it to be riskier for them.

• Buy-to-let (BTL) mortgage: A BTL mortgage can involve more expensive interest rates if you don’t deal with the right lender, because these investments can involve added risk.

• Joint mortgages: Having another person on the mortgage may make you financially stronger. This could lead to a larger deposit, pushing down your LTV ratio and qualifying for the best mortgage deals.

• Offset mortgages: with this mortgage, you can link some of your savings to your mortgage and offset them against the borrowed balance. Although you may not get a lower interest rate, it can reduce the amount of interest you pay in total because your rate applies to a smaller loan sum.

• Guarantor mortgages: if you’re struggling to get a decent deposit or borrow the amount you want, you can boost your finances for a mortgage by using a guarantor. Doing this guarantees they’ll make repayments if you can’t. Reducing the risk for lenders this way means they could be open to offering you a cheaper interest rate.

• Bad credit mortgages: if you’ve got adverse credit, some lenders won’t want to deal with you, or will offer you a much higher interest rate as a compromise. However, some specific bad credit lenders will still consider your application and be more likely to offer you a competitive rate.

Why Use Online Money Advisor?

If you want to find the best UK interest rates possible, you’ll need to scratch beneath the surface with the help of an expert mortgage broker. A skilled advisor can assess your property, lifestyle, and finances – and find the cheapest interest rates for your situation.

We offer a free broker-matching service. This means carrying out a quick assessment of your needs and introducing you to an experienced broker who can help you with your home ownership goals.

Just call 0808 189 0463 or make an enquiry. We’ll set up a free, no obligation chat between you and your ideal mortgage broker today.