What Makes A Good Mortgage Interest Rate?

A number of factors will determine if a mortgage rate is a good rate, and these factors always relate directly to your circumstances. A mortgage rate that is good for you, may not be good for someone else.

Interest rates show the price at which you can borrow money and there are different types of rates with each mortgage having the following three:

Initial Rate:

An initial rate is the amount charged by a lender to a borrower at the beginning of the mortgage. This is usually a promotional rate that is over a short-term period before then changing to the subsequent rate.

Subsequent Rate:

This is the rate that you will end up paying after the promotional period. It is usually the lender's Standard Variable Rate (SVR) and releases you from any early repayment charge that you may have to pay if you were to remortgage during the initial rate period.

Overall Rate For Comparison/APR:

This is simply the overall rate if you combine the initial rate with the subsequent rate and includes any fees that may have been added.

Typically, having a lower overall rate is the better option as this means that you will pay less interest over the life of your mortgage. However, there are circumstances where you may benefit from a lower initial rate, though this will result in bigger repayments further down the line.

Your property may be repossessed if you do not keep up repayments on your mortgage

We will charge a fee of £395 for a residential mortgage & £495 for a buy to let mortgage on application. In addition we will also be paid a procuration fee from the lender.