Why you need to choose carefully
Finding the mortgage that is best for your financial circumstances could help you:
Find one that you are eligible to apply for
Have more chance of being accepted
Save money with smaller repayments or a lower overall cost
Make sure you can afford the repayments
How large is your deposit?
Deposits are the amount you pay towards buying a property yourself. This can come from your savings or from the equity you own in your current home.
If you have £20,000 saved and want to buy a £100,000 property, your deposit would be worth 20% of the purchase price. Your mortgage pays for the rest of the price, and the percentage it covers is called the loan to value (LTV). In this example the LTV would be 80%.
Mortgages with a lower LTV are usually much cheaper because lenders will consider you less of a risk if you have a large deposit and can offer lower fees and interest rates.
Use our comparisons to only look at mortgages that you can get with the deposit you have. You can filter the results by the LTV required, so if you have a 20% deposit, only look at mortgages that offer an LTV of 80% or higher.
What if you have no deposit?
The only mortgages you can get without a deposit are guarantor mortgages, which require someone else to agree to cover your repayments if you miss them.
However, there are mortgages designed for low deposits and a range of schemes that help you get on the property ladder or save a deposit.
How long do you need to pay it off?
You can choose the term of your mortgage when you apply. This is how many years you will pay it off over. Mortgages are usually taken out over 25 years, but some lenders offer up to 40 years.
Choosing a longer term means your repayments will be smaller each month. A shorter term means you will pay it off quicker and pay less interest and less in total.
Do you want a fixed rate?
Mortgage interest rates can change, which means the amount you repay could go up if your interest rate rises.
You can get interest rates that are fixed for up to ten years. This means you will pay the same amount each month until the fixed rate deal ends.
You can also get other types of interest rate:
Standard variable rates (SVR) can change at any time
Tracker rates rise and fall when an index like the Bank of England base rate changes
Discount rates are a set amount below the lender's SVR
Do you want an interest only mortgage?
You can pay off your mortgage in two ways:
Repayment mortgages put the amount you pay each month towards both the interest and reducing the balance of your mortgage until it is paid off.
Interest only mortgages put your repayments towards the interest but the amount you owe will not go down. You will need to save up separately to pay off the balance.
Do you already have a mortgage?
If you already own a home but want a better mortgage, you can switch to a new deal.
You could pay less by getting a better interest rate as long as the fees do not cancel out what you could save. Here is how to work out if you can save money with a remortgage.
If you want to move house you can either transfer your existing mortgage to your new property or get a new mortgage for your new home.
What type of buyer are you?
Are you a first time buyer?
Not every mortgage is available to first time buyers, and many are only available if you have a large amount saved for a deposit.
However, there are many mortgages designed for first time buyers and schemes to help you get on the property ladder like:
The Help to Buy scheme gives you government support with your mortgage
The Right to Buy scheme lets you purchase your council house with a discount
Guarantor mortgages require another person to be named on the mortgage to cover your repayments if you miss them
Shared ownership mortgages let you buy a percentage of a property, which means your repayments and deposit could be much lower
Here is everything you need to know about buying your first home and the types of mortgages you can get.
Do you have bad credit?
Your credit history can put lenders off giving you a mortgage if you have:
Missed repayments on a mortgage, credit card, loan or other form of credit
Been through bankruptcy or had a county court judgment against you
Already borrowed more than you can afford to repay
However, you may still be able to get a mortgage. Although they are usually more expensive and require a larger deposit, bad credit mortgages may be more likely to accept you.
Are you getting a joint mortgage?
You may be able to borrow more if you get a joint mortgage, and you can split the monthly repayments between you.
Most joint mortgages are taken out by couples, but you could get one with friends or family too. Some lenders offer them for up to four borrowers.
Are you an older borrower?
If you need a new mortgage to move house or want to remortgage to a better deal, some lenders may not accept you if you will be retired before the mortgage is paid off in full.
However, you could still get a mortgage with a shorter term or from a lender with a higher maximum age.
Do you want to use your home to borrow money?
You could use an equity release mortgage to borrow money from the share of your home you have paid off already. They can be expensive but could help you pay off the rest of your mortgage or make a large purchase.
Do you need a specialist mortgage?
Do you want cashback on your mortgage?
Some mortgages offer a lump sum that you get once the mortgage has been taken out.
Although this bonus can be useful, it could be cheaper overall to get a mortgage without cashback but a lower interest rate.
Can you combine your mortgage and savings?
Some lenders offer offset mortgages that are combined with either:
A savings account
A current account
The amount you have saved reduces the amount of your mortgage you have to pay interest on. For example, if you had a mortgage of £150,000 and £50,000 in the linked savings account, you would only pay interest on £100,000 of your mortgage.
The amount this saves you could be more than the interest you would earn if you put the £50,000 in a savings account.
Are you building your own home?
If you want to build your own house, you could get a self build mortgage to pay for land, materials and other costs.
Are you self employed?
If you are self employed, you may not have a guaranteed salary and it can be difficult to prove how much you earn. This means not all lenders will be willing to offer you a mortgage.
However, some lenders may accept you if you can prove you earn enough to afford the mortgage.