If you’re looking for a new mortgage, then you will be keen to get the very best deal that you can. But, with thousands of products available through dozens of lenders, finding the right rate for you can be a bit of a minefield.
So, we’ve put together this simple guide to five of the best mortgages available at the end of September 2018. Keep reading to find out more.
1.49% – 2-year fixed rate with HSBC
Two-year fixed-rate mortgages are among the most popular type of deal. They will guarantee your repayments for the first couple of years, meaning you know exactly what you will be paying in the early years of your mortgage.
This HSBC deal offers a great rate of just 1.49% fixed until 30 November 2020. Your mortgage will then revert to HSBC’s Standard Variable Rate (SVR), currently 4.19%. The APRC is 3.8%. There is a £999 arrangement fee for this product, which can be added to the loan if you want to.
If you repay some or all of the mortgage before 30 November 2020 you’ll face an early repayment charge of 2% of the amount paid in the first year, and then 1% of the amount repaid to 30 November 2020.
The main downside to this deal is that it is only available to 60% loan-to-value. That means you’ll need a 40% deposit to take advantage or have at least 40% equity in your home.
On a £200,000 repayment mortgage over 25 years, your repayments on this deal would be around £800 per month.
2.25% – 5-year fixed rate with First Direct
If you’re looking to buy a new home and you have a 10% deposit, this deal offers the ability to borrow 90% of the purchase price and fix your repayments for the medium term.
This deal from First Direct has a rate of 2.25%, fixed for the first five years. Your mortgage will then revert to First Direct’s Standard Variable Rate (SVR), currently 4.19%. The APRC is 3.3%. There is a very reasonable £490 booking fee for this deal, although this fee is non-refundable.
There are early repayment charges if you pay off your mortgage before the end of the fixed-rate deal. There is a maximum loan size of £400,000.
If you’re buying your first home and you want the stability of knowing what your repayments will be in the medium term, this deal offers that security at a competitive rate.
On a £200,000 repayment mortgage over 25 years, your repayments on this deal would be around £875 per month.
1.24% – 2-year discounted variable rate with Monmouthshire Building Society
If you’re prepared to accept that your mortgage repayments may change in the first two years, then this discounted variable rate from the Monmouthshire Building Society is an appealing choice.
This deal offers a 4% discount from the Monmouthshire’s Standard Variable Rate (SVR) of 5.24% for two years. Available to 80% loan-to-value, this means you will pay an initial rate of just 1.24%. At the end of the two years your mortgage will revert to the Society’s SVR, currently 5.24%. The APRC is 4.7%.
Bear in mind that, as the deal is linked to the Monmouthshire’s Standard Variable Rate, your repayments could change at any time. The Society can raise or lower its SVR at any time, even if there has been no change to the Bank of England Base rate. You will remain at 4% below this SVR for two years from completion.
A product fee of £1,999 applies (this can be added to the loan) in addition to a non-refundable administration fee of £150, paid upfront. There are early repayment charges of 2% of the amount repaid in the first two years.
If you’re looking for a very low rate for the first two years and you are prepared to accept that your repayments may rise, then this deal offers a low initial interest rate. The £1,999 arrangement fee is substantial, however, meaning that it may be more suitable if you’re taking out a bigger mortgage.
On a £200,000 repayment mortgage over 25 years, your repayments on this deal would be around £780 per month.
2.45% – 10-year fixed rate with Coventry Building Society
Over recent years, long-term fixed rates have become more and more popular. With interest rates at record lows, the ability to guarantee your mortgage repayments for a decade or longer has appealed to many borrowers.
Available to a maximum 65% loan-to-value, this deal from Coventry Building Society will fix your mortgage at 2.45% until 31 December 2028. Your mortgage will then revert to the Coventry’s Privilege Rate, currently 4.74%. There is a £999 arrangement fee for this deal, and this can be added to the loan. The APRC is 3.3%.
There are early repayment charges if you pay off your mortgage before the end of the fixed-rate deal. These are 5% of the amount paid before 31 December 2019 then 3% of the amount repaid until 31 December 2021 and 1% of the amount repaid until 31 December 2023.
If you want to fix your repayments for the long term, then this deal gives you security for ten years with the added benefit that early repayment charges only apply for the first five years.
On a £200,000 repayment mortgage over 25 years, your repayments on this deal would be around £900 per month.
2.49% plus £500 cashback – 3-year fixed rate with Clydesdale Bank
If you’re a first-time buyer looking to fix your mortgage repayments and benefit from some cashback towards the cost of moving, this deal from Clydesdale Bank combines these benefits.
Available to a maximum 90% loan-to-value, this deal means you will only need a 10% deposit. Your mortgage will be fixed at 2.49% until 30 November 2021 before reverting to the Clydesdale Bank’s Standard Variable Rate, currently 5.2%. You will also receive £500 cashback on completion, and there is no arrangement fee for this deal. The APRC is 4.5%.
There are early repayment charges if you pay off your mortgage before the end of the fixed-rate deal. These are 6% of the amount repaid in year one, 5% of the amount repaid in year two, and 4% of the amount repaid in year three.
If you want to fix your repayments for the first three years and also benefit from a £500 lump sum when you move in to your new home, this deal offers those benefits.
On a £200,000 repayment mortgage over 25 years, your repayments on this deal would be around £900 per month.
Useful links
Why you should take fees and charges into account when choosing a mortgage
2-year or 5-year fixed-rate mortgage? Here’s what you should know
Thinking of a 10-year fixed rate mortgage? Here’s everything you should know
Is now the right time to take out a tracker or variable mortgage?
Disclaimer: All information in this article is for informational purposes only. Rates and terms are subject to change without notice.