How to get the best mortgage rate

Quick answer: To get a better mortgage rate, it can help to improve your credit score, compare offers early, save a larger deposit or build equity in your home. A lower rate could save you money over time, but check the full mortgage cost, including fees and early repayment charges.

Getting the best mortgage rate can mean big savings and more room in your budget. It may help you borrow a bit more for the home you want or simply give you peace of mind knowing you’ll have lower bills.

When it comes to mortgage rates, there are some things you can’t control, and some you absolutely can. Lenders look at the economy and Bank of England base rate to help them decide what rates to offer. But it’s your personal finances and credit history where you can make a real difference.

Improving your score, saving a larger deposit and comparing offers are just a few ways to get a better mortgage rate. This guide walks you through your options, whether you’re buying your first home, moving somewhere new or looking for the best remortgage deal.

How do I get the best mortgage rate when buying a home?

You’re more likely to get the best mortgage rate if lenders feel confident that you’ll be able to pay. If you’re looking for a new mortgage, here are some ways to help lenders see you as a safe bet, whether you’re a first-time buyer or home mover.

Lower your loan-to-value ratio

Your loan-to-value ratio (LTV) is a percentage that compares the size of your mortgage with the cost of your home. You’ll usually get a better mortgage rate with a lower LTV. This means you need to cover a larger percentage of the house price with your deposit.

There are two main ways to lower your LTV ratio, paying a larger cash deposit or finding a cheaper home. If you’ve already fallen in love with a place, negotiating the price down could be a third option.

The cheapest mortgage rates are usually on 60% LTV mortgages, which means paying a 40% deposit. But you can usually get a decent rate with a 20% deposit. Whatever your deposit is right now, increasing it by 5%–10% will usually get you a better mortgage rate.

Build a good credit history

Lenders are more likely to give you a cheaper mortgage if they see you’ve handled credit well in the past. Get a quick idea of how lenders see you with your credit score. A higher score means you’re more likely to get the best mortgage rates.

Don’t worry if your credit history isn’t amazing just yet, after all, you get to write your credit future. There are many ways to improve your score, and you can track its progress with a free Experian account.

Some ways to boost your score are:

• Making payments on time and in full. This can include payments for loans, credit cards, monthly phone contracts and even reported rent payments.
• Lowering your credit utilisation ratio. This means using a smaller percentage of your limit on credit cards and overdrafts.
• Registering to vote. Credit applications are smoother when your address is up to date on the electoral roll and your credit report.

Check your free score as often as you like with Experian. It updates every 30 days if you log in, and checking won’t harm it.

Fix your mortgage for longer

You may get a lower mortgage rate by choosing a longer fixed period. It’s common to find two-year and five-year fixed mortgages, and some lenders may even offer ten-year fixed rates.

Variable rates can go up or down, but a fixed rate stays the same while it lasts. It keeps you safe from rate rises, but you won’t benefit from any rate drops.

When your fixed period ends, you’ll be put on the lender’s standard variable rate (SVR) which can be higher. You may be able to switch to a new fixed rate when this happens.

Just so you know, there’s usually an early repayment charge if you overpay your mortgage during the fixed period, though some lenders let you overpay by 10% of your mortgage each year without charge.

Compare mortgage offers

Shopping around can help you find the best mortgage rates. You can compare mortgages with Experian. You’ll get a shortlist of your mortgage matches, and their experts can help explain your options and chances of approval. Just remember, we’re a credit broker, not a lender.

Tell us a few details and we’ll show you top mortgage offers from over 100 trusted lenders. It takes two minutes and won’t affect your score.

We’re a credit broker, not a lender.

How do I get a cheap mortgage overall?

If you want to save money while you pay off your home, it’s worth looking at the total cost of each mortgage, including fees, and plan ahead to switch to the best mortgage deals available.

Look at fees as well as the mortgage rate

Lenders often charge an arrangement fee to set up your mortgage. The other costs of getting a mortgage can include a higher lending charge and valuation fee. If a mortgage has a cheap rate but high fees, consider if it will still save you more overall. If you’re planning to use a mortgage broker to find a mortgage, it’s worth checking if they charge a fee, and if so, whether it’s fixed or a percentage of the mortgage.

Think carefully about fixed periods

Fixing your rate for longer may help you get a lower mortgage rate. But it’s possible that cheaper mortgages will become available while you’re locked into your fixed term. Some experts try to predict whether rates will go up or down, but no one can know for sure. The decision is a personal one. Think about how much risk you’re comfortable with and whether you could afford a rate rise.

Plan ahead to keep your mortgage cheap

It’s not uncommon to move to a new mortgage, like when your fixed rate ends or if you decide to move home. Planning ahead can help you get a better mortgage if you decide to switch. Some things to consider are: your credit score and report, your home’s value and how it’s changing over time, and your finances. Changes to your income, spending and savings may affect the mortgage amounts and rates available to you. It’s important to budget for future plans, like changing careers or starting a family.

How to get a better mortgage on my current home

One option is remortgaging, also called refinancing. This means switching to a new mortgage, ideally with a better mortgage rate. Remortgaging with your current lender can be faster and easier, but they might not have the best remortgage deals. It’s worth comparing mortgages to see what’s on offer.

How to get the best remortgage deal

To get the cheapest remortgage rates, it can help to:

• Get your credit in good shape. Check your score and report around three to six months before applying so you have more time to make improvements. A good credit score could help you get the best remortgage deals.
• Build equity in your home. This means increasing the value you own in your home, which should lower your loan-to-value ratio and improve the rates you see. Some ways to do this include home improvements and overpaying your mortgage. Some lenders may let you overpay by 10% of your mortgage each year without an early repayment charge.
• Start your search early. Give yourself time to compare mortgages, understand your options and find the right offer for you. It’s possible to lock in a rate up to six months before the mortgage starts.

Remember to look at the overall cost of remortgaging, including any fees. You won’t have to pay an early repayment fee if you switch mortgages after your fixed rate ends.

How to lower my mortgage payment

Sometimes finances change and you need your mortgage to take up less of your income. There are ways to lower your mortgage payments, like switching to a new deal or agreeing different terms with your lender. The right option for you depends on your needs and circumstances.

Switching to a new mortgage

Remortgaging to a cheaper rate or longer term may help lower your monthly mortgage payments. Just so you know, there’s an early repayment charge if you leave your current mortgage before its fixed period ends. If you have been stuck on an expensive mortgage, new rules introduced by the Financial Conduct Authority (FCA) might mean it’s easier to switch. You can learn more from MoneyHelper’s guides on remortgaging to cut costs and help for mortgage prisoners.

Agreeing new terms with your lender

If your mortgage doesn’t fit your budget comfortably any longer, talk to your lender about your circumstances. They may let you lower your mortgage payments by extending your mortgage term, only charging you interest for a while, or giving you a temporary payment holiday.

If you increase your mortgage term, you may pay more interest overall because you’ll pay it for longer. If your lender pauses or lowers your payments for a while, make a plan for when the payments go up again.

If you’re struggling with money and think you might miss a mortgage payment, speak to your lender and get free advice from organisations like Citizens Advice, MoneyHelper or StepChange.

How to find the best mortgage rate

If you’re looking for the cheapest mortgage rates, it’s a good idea to use a comparison service that does the hard work for you. You can compare mortgages with Experian. It won’t cost a thing, and it won’t affect your score.

Remember, finding the right mortgage can mean more than finding the cheapest mortgage rates. It’s worth thinking about things like the upfront costs, whether there’s flexibility to overpay, how the payments fit your budget and how much interest you’ll pay over the full term. If you need more help, especially if you’re looking for a specialised mortgage, you may want to use a mortgage broker.

How to prepare for a mortgage application

Getting your mortgage application right is important if you want to be approved for the best mortgage deal. Some ways you can prepare for a mortgage application are:

• Check your credit report and score three to six months before and see if you can make improvements to show lenders you’re a safe bet.
• Compare mortgages early to help you lock down a cheap rate.
• Save for the costs of buying a home, like legal and survey fees.
• Have proof of your deposit, like a savings account statement.
• Have proof of your employment and salary, or accounts if you’re self-employed.
• Have a current passport or driving licence to prove your identity.

We can help you understand the credit score you need for a mortgage as well as ways to improve your score for the best chances of approval.

Check your free score without affecting it. It updates every 30 days if you log in.