From buy-to-let investors to first-time buyers, there’s no purchase more major than a new home. It’s one of the more expensive assets most people will ever acquire. Not to mention, one of the most complex processes to negotiate smoothly.
Even if you know what you need and what you can afford, you still need to compare mortgage deals from dozens of banks and specialist lenders. Stick with the High Street alone and you’ll need to perform an in-depth mortgage comparison involving thousands of possible options.
Under no circumstances is it ever advisable to sign on the dotted line, before considering every available option.
The Value of a Full Market Mortgage Comparison
In order to illustrate the value of a full market mortgage comparison a little more clearly, you’ll find a series of current offers from major High Street banks listed below. The following rates were correct as quoted in January 2019, based on borrowing £170,000 over a period of 25 years:
Compare Lloyds Bank Mortgages
2 year fixed mortgage
Maximum LTV – 60%
Initial rate – 1.39% fixed until 28 Feb 2021
Subsequent rate (SVR) – 4.24% variable
Overall cost for comparison – 3.8% APRC
Completion fee – Zero
Product fee – £1,499
Compare Yorkshire Building Society Mortgages
2 year fixed stepped cashback mortgage
Maximum LTV – 65%
Initial rate – 1.53% fixed until 31 Mar 2021
Subsequent rate (SVR) – 4.99% variable
Overall cost for comparison – 4.3% APRC
Completion fee – £995
Product fee – Zero
Compared Halifax Mortgages
2 year fixed for first time buyers
Maximum LTV – 60%
Initial rate – 1.49% fixed until 28 Feb 2021
Subsequent rate (SVR) – 4.24% variable
Overall cost for comparison – 4.0% APRC
Completion fee – Zero
Product fee – £995 with an option to add to the loan
Compare Virgin Money Mortgages
2 year tracker
Maximum LTV – 65%
Initial rate – 1.68% base rate tracker until 01 May 2021
Subsequent rate (SVR) – 4.99% variable
Overall cost for comparison – 4.4% APRC
Completion fee – Zero
Product fee – £995
Compare Chelsea Building Society Mortgages
2 year fixed stepped
Maximum LTV – 75%
Initial rate – 1.68% fixed until 31 Mar 2021
Subsequent rate (SVR) – 4.99% variable
Overall cost for comparison – 4.3% APRC
Completion Fee – Zero
Product Fee – Zero
Additional Tips for Choosing a Mortgage
A quick glance at the above is enough to drive home the importance of a whole-of-market mortgage comparison, before making such an important final decision. In addition, there are steps that can and should be taken when considering a mortgage application, in order to ensure you access the best possible deal for your needs.
Get your credit score in shape
The stronger your credit rating, the more likely you are to be approved. Not only this, but your credit score also has a direct impact on the overall borrowing costs you’re likely to face, if your application is successful. There’s not a lot you can do to boost your credit score in the short-term, but if you’re planning ahead, it’s an important point to consider.
Consider how much can you afford
Just because you can qualify for a certain amount of money doesn’t mean you can necessarily afford it. Remember – a mortgage is a long-term commitment, which you’ll be stuck with for 15, 20, 30 or even 35 years. Make sure you can afford the loan and avoid borrowing more than you need. Check loan comparison sites to get the best rates and financial advice.
Look beyond the High Street
Consider High Street banks by all means, but also compare mortgages from the UK’s specialist lenders. There are dozens of independent specialists in business up and down the UK, which may be able to offer you an exclusive deal you won’t find on the High Street.
