There are many factors lenders look at when working out how much you can borrow. These include your salary, your spending, any regular outgoings and your credit history. Use our affordability calculator to see how much lenders might be willing to lend you.
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Looking for a mortgage? Get answers to your mortgage questions and an expert broker to find the best mortgage deal for you
Best mortgage rates today vs average rates
It's important to be aware that sometimes the deals with the lowest interest rates have additional product fees which can make your overall mortgage more expensive.
Below are some of the cheapest initial mortgage rates currently available (via our whole-of-market broker partner Mojo) compared to the average rates.
These rates are just an example to give you an indication of what's in the current mortgage market:
| Lowest UK rates | Average UK rates | |
|---|---|---|
| Two year fixed rate (75% LTV) | 3.98% | 5.06% |
| Two year fixed rate (90% LTV) | 4.54% | 5.18% |
| Two year fixed rate - buy-to-let (75% LTV) | 2.71% | 5.04% |
THESE RATES MAY NOT BE AVAILABLE WHEN YOU ARE READY TO SUBMIT AN APPLICATION
Date Updated 30 April 2025
A mortgage broker can look at your finances and help you find the best mortgage deal for you.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. The FCA does not regulate buy-to-let mortgages for commercial and investment properties.
Mortgage industry insights
The Bank of England (BoE) base interest rate is 4.5%. While this seems high, historically the base rate has been as high as 17% back in 1979. A change in the BoE base rate can affect variable mortgage interest rates and therefore monthly payments as it influences how banks charge for borrowing money. If you have a variable mortgage, your monthly payments may fluctuate depending on the base rate changes.
If you're on a fixed-rate deal, an increase in the base rate won't result in an increase in your payments initially. However, it might mean the fixed-rate mortgage deals available to you when you next remortgage or move home have different rates.
The next decision on whether to increase the base rate will be made on 7 November 2024.
How to get a mortgage
Getting a mortgage can be daunting, there's a lot to organise, but if you follow these steps you'll be on your way to securing a place you can call home:
Understand what mortgage you can afford - review your finances to understand how much deposit you can put down and the mortgage you can afford. Our mortgage affordability calculator helps give a rough estimate on how much you could borrow, but contact our expert mortgage broker Mojo to get a better idea on affordability.
Get a mortgage in principle - you might need to get a mortgage in principle (MIP) before you can start house hunting. Also called an agreement in principle (AIP) or decision in principle (DIP), many estate agents won't let you view a house unless you have one so they know you're serious about buying. A MIP essentially shows how much money the lender is willing to let you borrow, based on your financial situation, but it isn't guaranteed.
Make an offer - when you've found your dream home, submit an offer to the estate agent and if the offer is accepted you can make a formal mortgage application.
Gather the documents you'll need - you need to show your mortgage lender that you can afford the monthly repayments. So you need to gather proof of identity and address, bank statements, P60 forms, payslips and other financial documents. If you're self-employed, you'll need to show documents proving a steady income from the past two or three years.
Apply for a mortgage - you can speak to our expert mortgage brokers at Mojo mortgages who will provide free mortgage advice and submit an application for you.
Getting your best mortgage rate with Mojo Mortgages
Your Mojo expert can offer advice on finding the right deal for you
Tell us your mortgage information
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If you're eligible, you'll be shown a table of mortgage deals based on the information you provided
Get your best mortgage deal with an expert
Mojo experts will review the mortgage deal you like, make sure it's your best option, and sort the rest out for free
Mortgage calculators
How much can I borrow?
There are many factors lenders look at when working out how much you can borrow. These include your salary, your spending, any regular outgoings and your credit history. Use our affordability calculator to see how much lenders might be willing to lend you.
Home equity calculator
This tool can show you how much equity, or value, you have in your home. Enter your home's current value, your outstanding mortgage and any other debts secured against your home to find out how much equity you have built up in your property over the years.
Stamp Duty calculator
Stamp Duty is a tax on property transactions that you might have to pay when you buy a home. It’s important to check whether you have to pay it and how much it will be. Use our calculator to find out how much Stamp Duty you might have to pay.
Mortgage calculators
How much can I borrow?
Home equity calculator
This tool can show you how much equity, or value, you have in your home. Enter your home's current value, your outstanding mortgage and any other debts secured against your home to find out how much equity you have built up in your property over the years.
Stamp Duty calculator
Stamp Duty is a tax on property transactions that you might have to pay when you buy a home. It’s important to check whether you have to pay it and how much it will be. Use our calculator to find out how much Stamp Duty you might have to pay.
Types of mortgage rates
Fixed-rate mortgages
A fixed-rate mortgage has an interest rate that is set for a specific period of time. This means your mortgage repayments won’t go up or down for the duration of your fixed-rate. This is very useful when it comes to budgeting as you’ll know what your mortgage payments will be for the duration of your deal.
However, if the Bank of England base rate drops during your fixed-rate period, you won’t benefit from lower interest rates.
You can get a 2-year fix, 5-year fix or 10-year fix, but there are also deals that last 1, 3, 7 or longer than 10 years.
Variable-rate mortgages
A variable-rate mortgage has an interest rate that can go up or down. This means your repayments could change throughout the course of your mortgage. A variable-rate mortgage might be cheaper than a fixed-rate one initially but could end up being more expensive overall.
Variable-rate options include discounted and tracker mortgages, as well as standard variable rate (SVR) mortgages.
Tracker mortgages
A tracker mortgage tracks the Bank of England base rate by a set amount. For example, you might get a tracker mortgage that is set to track at two percentage points above the base rate.
This means when the base rate rises or falls, your interest rate will rise or fall with it at two percentage points. So for example, if the base rate rises to 3%*, you pay interest at 5%.
* for demonstration purposes only, the UK base rate is currently 4.5%
Discounted mortgages
A discounted mortgage offers an interest rate at a set amount below the lender's standard variable rate (SVR).
This means it will fall and rise with your lender's SVR, but will remain the set amount cheaper throughout your initial deal. This discount can be in place for a fixed period or for the lifetime of the mortgage.
Kirsty Lacey, Mortgage Expert at Mojo Mortgages, said:
“It’s important to understand the difference between a discounted rate and a fixed rate mortgage. While a discounted rate often appears cheaper at first, this is a variable rate so it’s subject to change throughout your deal, meaning it could increase or decrease at any time.
A fixed rate deal might seem more expensive at first, but you’ll have peace of mind that your payments won’t increase during the length of your deal.”
Standard variable rate (SVR) mortgages
If you have a fixed, discounted or tracker mortgage that is coming to the end of its initial period, you will move onto your lender’s SVR.
This will usually be more expensive, as you'll be paying the lender's default rate, by your lender. If you don’t want to move onto your lender's SVR after your initial deal ends, you should consider remortgaging to a new deal.
Being on an SVR does offer a greater amount of flexibility than some other deals, with no ERCs to pay, which might be helpful if you're planning to move soon. However, you can sometimes get other deals (such as tracker mortgages) that offer no ERCs which may offer better rates. A broker can help you find the right deal for your and your circumstances.
Offset mortgages
Offset mortgages allow you to use your savings to reduce the amount of interest you pay on your mortgage. The money in your savings is offset against the money you've borrowed.
For example, if you have borrowed £200,000 for your mortgage, but you have £25,000 in savings, you will only pay interest on £175,000.
You can still access your savings and withdraw your money, but you won't save as much on mortgage interest due to the lower amount in your account. This means offset mortgages are generally only beneficial if you save more in the interest you would be paying on your mortgage, than you would be making on your savings.
Your savings account must be with the same bank or building society as your lender.
Offset mortgages can be either fixed or variable rate deals.
Types of mortgage rates
Fixed-rate mortgages
A fixed-rate mortgage has an interest rate that is set for a specific period of time. This means your mortgage repayments won’t go up or down for the duration of your fixed-rate. This is very useful when it comes to budgeting as you’ll know what your mortgage payments will be for the duration of your deal.
However, if the Bank of England base rate drops during your fixed-rate period, you won’t benefit from lower interest rates.
You can get a 2-year fix, 5-year fix or 10-year fix, but there are also deals that last 1, 3, 7 or longer than 10 years.
Variable-rate mortgages
A variable-rate mortgage has an interest rate that can go up or down. This means your repayments could change throughout the course of your mortgage. A variable-rate mortgage might be cheaper than a fixed-rate one initially but could end up being more expensive overall.
Variable-rate options include discounted and tracker mortgages, as well as standard variable rate (SVR) mortgages.
Tracker mortgages
A tracker mortgage tracks the Bank of England base rate by a set amount. For example, you might get a tracker mortgage that is set to track at two percentage points above the base rate.
This means when the base rate rises or falls, your interest rate will rise or fall with it at two percentage points. So for example, if the base rate rises to 3%*, you pay interest at 5%.
* for demonstration purposes only, the UK base rate is currently 4.5%
Discounted mortgages
A discounted mortgage offers an interest rate at a set amount below the lender's standard variable rate (SVR).
This means it will fall and rise with your lender's SVR, but will remain the set amount cheaper throughout your initial deal. This discount can be in place for a fixed period or for the lifetime of the mortgage.
Kirsty Lacey, Mortgage Expert at Mojo Mortgages, said:
“It’s important to understand the difference between a discounted rate and a fixed rate mortgage. While a discounted rate often appears cheaper at first, this is a variable rate so it’s subject to change throughout your deal, meaning it could increase or decrease at any time.
A fixed rate deal might seem more expensive at first, but you’ll have peace of mind that your payments won’t increase during the length of your deal.”
Standard variable rate (SVR) mortgages
If you have a fixed, discounted or tracker mortgage that is coming to the end of its initial period, you will move onto your lender’s SVR.
This will usually be more expensive, as you'll be paying the lender's default rate, by your lender. If you don’t want to move onto your lender's SVR after your initial deal ends, you should consider remortgaging to a new deal.
Being on an SVR does offer a greater amount of flexibility than some other deals, with no ERCs to pay, which might be helpful if you're planning to move soon. However, you can sometimes get other deals (such as tracker mortgages) that offer no ERCs which may offer better rates. A broker can help you find the right deal for your and your circumstances.
Offset mortgages
Offset mortgages allow you to use your savings to reduce the amount of interest you pay on your mortgage. The money in your savings is offset against the money you've borrowed.
For example, if you have borrowed £200,000 for your mortgage, but you have £25,000 in savings, you will only pay interest on £175,000.
You can still access your savings and withdraw your money, but you won't save as much on mortgage interest due to the lower amount in your account. This means offset mortgages are generally only beneficial if you save more in the interest you would be paying on your mortgage, than you would be making on your savings.
Your savings account must be with the same bank or building society as your lender.
Offset mortgages can be either fixed or variable rate deals.
Mortgage repayment types
Capital repayment
A capital repayment mortgage means you pay off the interest payment and a bit of the loan amount you've borrowed each month.
The amount which you owe will get smaller when you make a repayment each month, until eventually you reach the end of your term and become mortgage-free. This means you own your home outright.
Interest-only repayment
An interest-only mortgage means you only pay off the interest of your mortgage. This makes the monthly repayments much lower, but it's important to be aware that you won't be reducing the overall debt you owe.
When the mortgage term ends, you'll still owe the full amount of the mortgage loan.
Very few lenders offer interest-only mortgages, with the vast majority only offering repayment mortgages to residential homes. A repayment mortgage means you'll make monthly payments for an agreed period of time until you've paid back the capital (loan amount), plus interest.
However, many buy-to-let mortgages are interest-only as you're purchasing a property that you intend to let out. Lenders base buy-to-let mortgage loans on the potential rental income. It's preferred to offer an interest-only mortgage as the lower monthly payments keep business costs low.
You could also get an retirement interest-only mortgage if you're an older borrower. This is where you make monthly interest payments but the full loan gets paid off when you die, move into long term care, or sell your house.
Mortgage repayment types
Capital repayment
A capital repayment mortgage means you pay off the interest payment and a bit of the loan amount you've borrowed each month.
The amount which you owe will get smaller when you make a repayment each month, until eventually you reach the end of your term and become mortgage-free. This means you own your home outright.
Interest-only repayment
An interest-only mortgage means you only pay off the interest of your mortgage. This makes the monthly repayments much lower, but it's important to be aware that you won't be reducing the overall debt you owe.
When the mortgage term ends, you'll still owe the full amount of the mortgage loan.
Very few lenders offer interest-only mortgages, with the vast majority only offering repayment mortgages to residential homes. A repayment mortgage means you'll make monthly payments for an agreed period of time until you've paid back the capital (loan amount), plus interest.
However, many buy-to-let mortgages are interest-only as you're purchasing a property that you intend to let out. Lenders base buy-to-let mortgage loans on the potential rental income. It's preferred to offer an interest-only mortgage as the lower monthly payments keep business costs low.
You could also get an retirement interest-only mortgage if you're an older borrower. This is where you make monthly interest payments but the full loan gets paid off when you die, move into long term care, or sell your house.
What affects your mortgage rate?
Your mortgage rates are based on a variety of factors, such as:
Credit score - Make sure you're consistently paying off any outstanding debt on time to prove to the mortgage lender that you can keep on top of monthly repayments. You can also build up your credit score by avoiding applying for other forms of credit and making sure you've registered to vote.
Deposit amount and loan to value (LTV) ratio - A bigger deposit means a lower LTV ratio, as a result you'll have higher equity in the property which is deemed as lower risk for mortgage lenders. The best rates are usually offered around 60% LTV.
Type of mortgage - If you choose a fixed mortgage your interest rate will stay the same for a set period of time. But if you have a variable mortgage, the rate can fluctuate during the deal period.
How to compare mortgage interest rates
Compare rates with the help of an expert
Our expert broker partner Mojo can offer free advice to help you find your best mortgage rate.
When you repay your mortgage loan, you need to pay back interest as well. The interest rate on your deal will therefore determine how expensive your monthly repayments are.
If you're on a variable rate, this may increase during your deal, meaning your monthly payments will also go up. However, it could also decrease.
You can fix your rate if you think rates are going to go up or you want the peace of mind of knowing how much your mortgage payments will be throughout the initial deal.
Apply for your best deal
If you've found a mortgage deal you like using Mojo's deals table, your expert can help recommend your best option.
They'll also help you apply for your mortgage, taking the hassle out of the process.
Decide what kind of mortgage is right for you
Remortgage
If you’re at the end of your initial deal, which could be a fixed-rate mortgage or variable-rate mortgage, you should consider remortgaging to a new deal to avoid potentially paying your lender’s higher standard variable rate (SVR).
If you need money for something specific, like a home renovation project, you can also borrow against your property by remortgaging to increase the size of your mortgage.
You can either remortgage to a new lender or change to a different deal from the same bank or building society (this is known as a product transfer).
Moving home mortgage
This is also known as a home-mover mortgage.
It’s used if you can’t take your existing mortgage with you (known as porting a mortgage) when you move to a new home and therefore need to take out a new mortgage.
Make sure you take any charges for leaving your existing mortgage early into account when calculating your moving costs.
Most mortgages have early repayment charges (ERCs) if you switch to a new deal before the initial deal ends.
First-time buyer mortgage
If you’re buying a home and have never owned a property anywhere in the world before, you’re classed as a first-time buyer. Saving up enough of a deposit to be eligible for a first-time buyer mortgage can be daunting.
But lenders often have 90% LTV mortgage and even 95% LTV mortgage deals available, so you may only need a 5 or 10% deposit to get on the property ladder. You also have the option to buy your first home through shared equity schemes, like Help to Buy mortgages.
While much rarer, you may even be able to borrow up to 100% with a guarantor mortgage, where someone, usually a family member, agrees to pay the mortgage if you can’t.
Buy-to-let mortgage
A buy-to-let mortgage is required if you are looking to buy a property to rent out as an investment.
These are usually interest-only mortgages, which means you only repay the interest each month. This means you need to pay back the amount borrowed (the capital) at the end of the term.
Often lenders will require a minimum deposit of 20-25% (although sometimes they may require more) and the amount you can borrow depends on the rental income you will get for the property each month.
Typically, it will have to cover your monthly interest payment by at least 125%, although the exact figures depend on the lender.
Mortgage FAQs
What is the best mortgage rate?
The best mortgage rate for you will depend on your personal circumstances and the wider economic situation. Throughout 2022 and 2023, mortgage rates have risen significantly compared to previous years.
However, there are still mortgage deals out there. It's important to be aware that sometimes the lowest initial interest rate may seem like the cheapest but make sure you factor in additional product fees before choosing one as they can make your mortgage more expensive overall.
A mortgage broker can explain any additional fees to you to make sure you're getting the right deal for you.
How much could I borrow?
The amount that you can borrow for a mortgage is based on a number of factors, including your salary, your monthly outgoings, your credit score, and any existing debt or loan agreements you may have in place. Normally you can borrow around 4 - 4.5 times your annual income.
You can use our calculator to get an idea of how much banks and other mortgage companies may be willing to lend you.
How much will it cost to buy a house?
On top of your deposit and mortgage, there are many fees and costs associated with buying a home, including solicitor fees, arrangement fees, property surveys and Stamp Duty.
It's worth budgeting for all the fees that are involved, to make sure you have enough money side. It's also wise to include an emergency budget for unexpected costs.
Do I need a new mortgage if I move house?
It depends on your mortgage. Most mortgages are portable, meaning you can keep them if you move. However, this isn't always the cheapest option and you may be able to find better mortgage rates if you switch.
If you're planning on moving and locked into your current deal, it could be worth speaking to a mortgage adviser as they can likely advise you on the best option for your circumstances.
Is it better to buy or to rent?
Knowing whether you should rent or buy a home depends on your personal situation, there are pros and cons to both.
In terms of monthly payments, renting is typically more expensive but buying has more upfront fees, such as stamp duty and solicitor fees. Also with buying, you'd have to factor in paying for urgent repairs that can put a strain on finances.
But at the end of the day, buying a house means your monthly repayments are going towards the house you own and not a landlord's pocket.
How can I save up a deposit?
It can be really hard to save up a house deposit, particularly as a first-time buyer. If you're struggling, consider opening a Lifetime ISA. The government will boost your savings by 25% (you can save a maximum of £4,000 per year) as long as you use the money for your first home or retirement.
There are terms and conditions involved though so do your research before deciding if it's right for you.
If you haven't already, it's also worth setting up a standing order to divert money into savings as soon as you get paid. Plus, it may be worth doing a financial review to see if there are any expenses you could cut back on.
Can I get a mortgage with no deposit?
Yes, it is possible to get a no deposit mortgage but it can be difficult to find a mortgage lender who will offer this.
Also known as a 100% loan to value (LTV) mortgage, you're more likely to get approved for this type of mortgage if you have a high credit score. Some lenders may also insist that you have a guarantor as extra security if you miss any repayments.
What are the costs involved with getting a mortgage?
When comparing mortgages, it's important to look for the best mortgage rates but don't get caught out by additional mortgage fees that can end up making your mortgage more expensive.
Not all of the following charges will apply to all mortgages, but some of the main costs involved with getting a mortgage include:
Broker fee
- Some mortgage brokers charge for their services, but if you compare mortgage rates with Mojo they offer their expert advice free of charge.
Booking fee
- This is a non-refundable upfront charge that secures your loan when you make a mortgage application.
Arrangement fee
- Also known as a completion fee, this is the amount you pay your lender to set up your mortgage. This can typically cost up to £2000, which you can choose to pay upfront or add to your mortgage. If you decide to add the fee to your mortgage, remember that you'll have to pay interest on it.
Valuation fee
- The lender values your property to ensure it's worth the amount you're borrowing. Some mortgage lenders won't charge a fee, others will, and the cost varies depending on the value of the property.
Solicitor fees
- Is the amount your solicitor charges to handle the legal side of buying the property. This includes services such as transferring title deeds and arranging contracts. The fee can be anywhere from £850 - £1,500.
How do mortgage repayments work?
With a repayment mortgage, each monthly payment pays off some of the capital (the loan itself) and some of the interest applied to the loan. This means that by the end of the mortgage term, you should have repaid the entire loan plus interest so will own the property outright.
With an interest-only mortgage, you'll only repay the interest each month. The amount you borrowed won't be repaid until the end of the mortgage term.
The vast majority of residential mortgages are on a repayment basis. This is because interest-only mortgages are much riskier. Buy-to-let mortgages are, however, often interest-only, so if you're purchasing a property to rent out, this may be a good option for you.
Can I get a mortgage with bad credit?
The best mortgage offers are typically given to borrowers who are seen as low-risk and can prove to the lender that they are responsible with money. That means, having a high credit rating will really help you secure a good mortgage rate.
There are a number of ways to build your credit score, such as:
Checking for mistakes and cancelling any unused credit accounts
Making sure you keep your address up-to-date
Registering on the electoral roll
Getting a credit card which you pay back in full each month
Setting up direct debit payments so you don't miss any payments
Limiting credit applications over a short period of time
That's not to say if you have bad credit you can't get a mortgage, you just might not get the best deals.
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