Online Mortgage Rates

The internet has proved to be a boon when comparing mortgage rates. With so many mortgage products and offers available, it would be very difficult and time consuming to collate the information by hand.

It only takes a few minutes to make an online mortgage application so that you can compare mortgages online. There are many online mortgage brokers and online mortgage lenders who can provide a comprehensive online mortgage comparison.

Some lenders only deal directly with customers, such as online bank Egg and HSBC/First Direct. Others give discounts on fees and other incentives to those requesting a mortgage quote online and for applying online.

Once you have your online mortgage quotes it is important to understand fully the different terms used so that you can properly compare the different online mortgage rates.

Each lender will typically have a standard variable rate, which is usually the standard rate of interest charged above the bank base rate. A variable-rate mortgage, therefore, may fluctuate and follow the direction of the Bank of England's base-rate changes.

You may be offered a discounted variable-rate mortgage. Here the lender offers a discount off its standard variable rate. Again, the rate could go up or down along with the lender's variable rate, and the period over which the discount is available will vary.

Another option is the fixed-rate mortgage, where the interest is 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.

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.

Flexible mortgages allow you to underpay or overpay and possibly take payment holidays, and the interest rate payable could be variable, fixed or discounted.

Tracker-rate mortgages are 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