Lowest Mortgage Rates

Obviously, everyone wants to pay the lowest mortgages rates. However, there are so many mortgage deals available, each with different conditions, that it is usually not straightforward to ascertain the lowest rate mortgages.

You may be attracted to a mortgage deal offering what seems to be the lowest mortgage interest rate. However, the interest rate may only be low for a certain period, there may be a hefty fee attached to the mortgage application, and/or you may be tied into the mortgage for a long period where ending the mortgage early would attract high redemption fees. Criteria like these can cause deals with the lowest mortgage rates to not look anything as attractive when all factors have been considered.

There are numerous online mortgage comparision websites that can search out the lowest mortgage interest rates instantly. Independent mortgage brokers can also provide a selection of the lowest home mortgage rates, although they may charge a fee or commission for this service.

Once you have found what you believe is the lowest home mortgage rate available to you, it is important to fully understand exactly what kind of mortgage it is, as this could greatly affect what you would pay overall.

Each lender will have a standard variable rate, which is usually the standard rate of interest charged above the bank base rate.

Most of the lowest mortgage rates are found in deals that differ from the lender’s standard variable rate, however. Many people search out the lowest fixed rate mortgages available, for example. Fixed-rate mortgages have the interest set at a certain level for a certain amount of time, typically two to five years, regardless of whether the lender’s variable rate goes up or down over the period.

You may be offered a discounted variable-rate mortgage. Here the lender offers a discount off its standard variable rate. The rate could go up or down along with the lender's variable rate.

With capped-rate mortgages there is an upper limit on the interest rate charged and therefore if the lender's variable rate rises above this you will be unaffected, just as you would with a fixed rate mortgage. If the lender's rate falls below the level of your cap, you are able to benefit from this.

Another option, the tracker-rate mortgage, is sometimes linked to the lender's variable rate but usually to the Bank of England base rate. They follow the base rate with a discount or a premium for a set period of time.

By Ben West