Get an idea of what you can get
Whether you're going for a fixed or variable mortgage, you need to start looking at what rates you can get. This will depend on the size of your deposit and the value of the property.
But, in starting your search for the best deal, the first thing you need to know is:
"NEVER just go to your bank for a cheap deal."
Your existing bank will only give you its tiny range of deals, not the array of alternatives, meaning it's highly unlikely you'll stumble across the best one for you.
Only check what it's offering as a starting point. Call me or send me a message to check the whole market.
Comparing mortgages can be confusing. There are over 6,000 mortgage products, so you need to know how to search through our comparison site to find the best deals for you.
Need to know how to find the best deals for you?
The steps below help you benchmark a rate – to get a good estimate of what your rate and payments would look like. This is pretty straightforward and shouldn't take you more than 10 minutes.
1 - Go to our best buys to get a benchmark
No comparison site guarantees to show you all the deals available. This is because the mortgage market is complicated and some deals are only available through certain brokers, making it very difficult for a comparison site to know about every single deal at all times. But our Mortgage Best Buys tool has all deals available direct, and most available to brokers, so it's a great place to start.
2 - Enter your loan amount and property valuation accurately
At the top of the screen when you click onto best buys, you have the opportunity to select if you're a first-time buyer, remortgaging or moving home. You'll also need to put in how much you want to borrow, and how much the property is worth.
This calculates your loan-to-value ratio (LTV) and so influences which products you're shown.
3 - Find the info you need on screen
There's a lot of information. Some details are more vital to read than others. The most important information's prominently displayed; choices about your deal are on the left, information about the mortgage products is in the table. Ask me to locate:
Buyer type (first-time buyer/remortgage/moving home)
Mortgage type (eg, fixed/variable)
Initial deal length (eg, two years)
Interest rate (eg, 1.89%)
Fees (arrangement, booking and valuation – no others)
Monthly payment
It's now time to select what type of mortgage you want.
4 - Use the filters on the left to choose between fixed mortgages and variable mortgages
If you're already certain, then select the type you want. If you're still not sure, leave all options selected.
5 - Use the filters on the left to select your initial deal length
The initial deal length is how long your deal will stay at the advertised interest rate. For a fixed mortgage, this is how long the rate is fixed for. For a variable mortgage, this'll be how long a discount applies to the rate. If you know how long a deal you want, pick that from the filter. If not, again, leave them all selected.
6 - Find a realistic benchmark
We say realistic, because if you're looking at the product at the top of the table, it's probably not. You're probably looking at a lovely low rate with a fairly large fee.
One way around this is to change the sort filter on the right hand side of the tool. You're able to search products by monthly payment, initial rate, set up fees – and our MSE Total Cost Assessment. This combines the rate and the fees to tell you which will be the cheapest mortgage overall; invariably it's not one with a large fee.
7 - Choose your deal
Once you've found some deals that suit your circumstances and budget, click 'key information' to find out more. This will tell you other information about the product, such as how much you'll need to pay the lender for a valuation, and whether you're allowed to overpay.
8 - Go get your deal
Once you're happy you can click on 'Next Steps'. This will then give you two main options. The first is to contact a broker about the deal. The broker will be able to check that it actually is the best deal for you by doing a comparison with other deals out there.
If you're confident you've picked a winner, you can go for the second option which is simply clicking through to the lender to start an application.
? Has coronavirus made it more difficult to remortgage/get a good deal?
The mortgage market has shifted since lockdown began. Here's what you need to know:
It's harder to find deals for borrowers with small deposit or little equity. If you have a high LTV (meaning an small amount of equity) or a small deposit if you're a first-time buyer, it's become a bit more difficult to find a good deal. This is because many lenders have withdrawn high LTV deals so to find a good deal you typically will need at least a 15% deposit or an LTV of 85%.
There's stricter lending criteria for some. David Hollingworth of L&C Mortgages says that due to economic uncertainty, lenders are following stricter criteria. Many aren't factoring in variable portions of income, such as bonuses, overtime or commission (while they did in the past). And some borrowers on furlough might fall foul of affordability assessments if they're on a reduced income – as it might be trickier to demonstrate that the mortgage is affordable.
There are some positives – rates are still super-cheap (although slowly creeping back up) and lenders are eager to attract borrowers. While millions are asking for payment holidays, if you're keeping up payments, and you've still got full income, there are opportunities for huge savings by remortgaging. See our Remortgage guide on when and when not to remortgage.
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