Mortgage comparison checklist

Once you know how much you can borrow and the deposit required, you need to compare the mortgages available on the market. This means looking at more than just mortgage rates and making sure you pick a product that makes sense for your lifestyle. Use this checklist to help you compare and decide which mortgage features are most important to you.

1. Do you want a repayment or interest-only mortgage?

Use our Mortgage Affordability Calculator to find out how much you can afford to borrow.

Before you compare mortgages, you need to choose which type you’d like.

  • A repayment mortgage means paying off the amount you’ve borrowed and the interest as you go along.
  • With an interest-only mortgage you only pay back the interest of the sum you’ve borrowed as you go along. Once you reach the end of your term, you’ll need to pay back the sum you borrowed. 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.
Get your head round the basics with Mortgages – a beginner’s guide.
Find out more about Mortgage repayment options.

2. Do you want fixed monthly payments?

Next you’ll need to decide if you want a fixed or variable rate mortgage.

  • A fixed-rate mortgage means paying off a set fee each month.
  • A variable rate mortgage means payment rates aren’t set and the amount you need to pay can change.

3. Compare more than just the rate

Look at the Annual Percentage Rate of Charge (APRC) when considering mortgages with different upfront fees. It’s a way of illustrating the whole cost of your mortgage.

It’s not just 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.

For example, if you’re willing to pay an 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.

Using mortgage comparison websites

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:

Remember:

  • 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. 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.

Bear in mind that you’ll pay interest on that extra debt for years to come.

5. Do you want the flexibility to overpay, underpay or take payment breaks?

Some mortgages allow you to overpay. 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.

6. 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, but most lenders charge exit fees. If you’re on a fixed-rate deal, early repayment fees can be substantial.

If you’d like to have this option, 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 low.

Read more about Remortgaging to cut costs.

7. 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.

8. 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.

Did you find this guide helpful?