Your mortgage comparison checklist
Once you know how much you can borrow and the deposit required, you need to select a mortgage. Use this checklist to help you compare and decide which mortgage features are the most important to you.
- 1. Do you want a repayment or interest-only mortgage?
- 2. Do you want fixed monthly payments?
- 3. Do you want to start with the lowest possible rate?
- 4. Are you happy to pay a large fee in return for a lower rate?
- 5. Do you want to add some/all of your mortgage fees into your mortgage?
- 6. Do you want the flexibility to overpay, underpay or take payment breaks?
- 7. Do you want to be able to move lenders (remortgage) whenever you want?
- 8. If interest rates rise, do you want to make sure you won’t pay interest above a certain rate?
- 9. Do you want to use your savings to help pay off your mortgage sooner?
- Your next step
1. Do you want a repayment or interest-only mortgage?
This means you choose between paying off the amount you’ve borrowed and the interest as you go along or only paying back the interest.
Bear in mind that with an interest-only mortgage you’ll need to be able to show the lender that you have a strategy or investment plan that will pay off the mortgage when it is due. It’s much harder to get an interest-only mortgage now and lenders don’t always offer them. Find out more in our guides below.
2. Do you want fixed monthly payments?
You may want to have certainty about your future monthly payments. If you need that certainty and you can find a reasonable and affordable deal, consider a fixed-rate mortgage. Understand more about choosing between fixed or variable rate mortgages.
Read more in Mortgage interest rates – the different types.
3. Do you want to start with the lowest possible rate?
It’s not always about the rate – there are other factors to consider when choosing a mortgage. Make sure you shop around for a deal which works for you and that you can afford.
Comparison websites are a good starting point for anyone trying to find a mortgage tailored to their needs.
We recommend the following websites for comparing mortgages:
- Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
- It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
- Find out more in our guide to comparison sites.
4. Are you happy to pay a large fee in return for a lower rate?
If you’re willing to pay a large upfront arrangement fee, you can often get a lower interest rate. If you go for a fee-free mortgage, you’ll probably have to pay a higher rate.
Read more in Mortgage related fees and costs.
5. Do you want to add some/all of your mortgage fees into your mortgage?
If you can’t afford to pay these fees right now, you should find out if you can add them to your mortgage. Bear in mind that you’ll pay interest on that extra debt for many years to come.
Read more in A guide to mortgage fees and costs
6. Do you want the flexibility to overpay, underpay or take payment breaks?
Some mortgages allow you to overpay sometimes – in other words, pay more than your normal monthly payment. Some allow you to underpay or even take a short mortgage holiday where you don’t have to repay any money at all. Whether these features are available to you will depend on the mortgage terms and conditions as well as your financial circumstances.
7. Do you want to be able to move lenders (remortgage) whenever you want?
Remortgaging to a better product can save you hundreds and sometimes thousands of pounds. Most lenders charge exit fees. If you’re on a fixed-rate deal, early repayment fees can be substantial. Speak to the lender, or use a mortgage broker to help you find a mortgage where there are no exit fees, or where the exit fees are very low.
8. If interest rates rise, do you want to make sure you won’t pay interest above a certain rate?
Some mortgages come with a capped rate feature where the rate won’t rise above a certain level.
Read more about capped rate mortgages in Mortgage interest rates – the different types.
9. Do you want to use your savings to help pay off your mortgage sooner?
You could use your savings to help you reduce your outstanding mortgage and pay less interest. If you want to do this, an offset mortgage will give you the most flexibility.
Find out more in Mortgage special features.