How to Find a Lower Interest Rate on your Mortgage and save Money

How to Get a Lower Interest Rate on Your Mortgage

Finding the lowest mortgage interest rate isn't as simple as picking the one advertised. The best rates are often reserved for borrowers who meet specific eligibility criteria. Here are the key ways you can improve your chances of securing a lower interest rate:

Use a Mortgage Broker
Applying for the lowest rate you see without checking if you meet the lender’s criteria can lead to rejection, which may affect your chances with other lenders. A mortgage broker can help you apply only where there’s a strong chance of approval, ensuring you secure the best rate available.

Put Down a Bigger Deposit
A larger deposit reduces the amount you need to borrow and can also increase your chances of approval for lower rates. With a whole-of-market broker and a sizeable deposit, you’ll have access to a broader range of lenders and better mortgage deals.

Credit Optimisation
Your credit history significantly impacts mortgage applications. Ensure your credit report is accurate and up to date before applying, as even small issues could hinder your ability to qualify for the best rates.

Green Mortgages
Green mortgages offer lower interest rates to those purchasing energy-efficient homes. If your property meets the criteria, you could secure a better deal by exploring these options through a broker who knows the providers offering such products.

How a Broker Can Help You Lower Your Rate

A mortgage broker's role goes beyond finding you a mortgage. They specialise in securing the best possible deal based on your circumstances. Here’s why working with a whole-of-market mortgage broker is essential:

• They have extensive knowledge of the UK mortgage market.

• They’ll assess the benefits of different loan types, such as fixed or variable rates.

• They know which lenders offer the lowest rates for your specific situation.

• They help optimise your application to improve your chances of securing a lower rate.

By working with a broker, especially one who deals with niche or complex cases, you increase your chances of obtaining the lowest mortgage rate possible.

Securing a Lower Rate on Your Remortgage

When your mortgage is up for renewal, your current lender may offer a new deal. While this is often convenient, it may not be the most cost-effective option. A whole-of-market broker will compare your lender’s offer with other deals to ensure you secure the lowest rate available.

Given the constant changes in the UK mortgage market, it’s essential to have expert advice to find the most suitable lender and the best deal. Below are some current mortgage rates from leading providers:

Example Mortgage Rates

• Nationwide: 4.04% | 60% LTV | 5-year fixed-rate, £999 product fee

• Barclays: 4.65% | 90% LTV | 5-year fixed-rate, £999 product fee

• HSBC: 5.54% | 85% LTV | 2-year tracker rate, £999 product fee

These rates are subject to change, so speaking to a broker is the best way to get accurate and up-to-date information on what’s available.

Other Ways to Lower Your Mortgage Payments

If remortgaging isn’t an option, there are still other ways to reduce your mortgage payments. The brokers we work with can offer several short- and long-term strategies, such as:

• Extending your mortgage term: This reduces monthly payments by spreading them over a longer period.

• Switching to an interest-only mortgage: For short-term relief, this can lower your payments, but you won’t be paying down the principal.

• Changing your rate type: You may be able to save by switching from a fixed to a variable rate or vice versa.

• Exiting your lender’s standard variable rate (SVR): Most SVRs are higher than other deals available, so switching can lead to savings.

• Switching to an offset mortgage: If you have savings, an offset mortgage could help lower your interest payments.

These options should be discussed with a broker before contacting your current lender to ensure you’re considering the full range of deals on the market.

Why Use Mortgage One

At Mortgage One, we offer a the best mortgage advice tailored to your unique situation. Here’s why choosing us makes a difference:

• There’s no impact on your credit score.

• You’ll receive a personalised service from a specialist broker.

• We provide support throughout the entire application process.

• If you don’t get approved through us but manage to secure a mortgage elsewhere, we’ll give you £100 back.

FAQs

Which lenders offer the lowest mortgage rates?
There is no fixed answer to this question as each lender has its own criteria. The best rates are offered to borrowers who meet these criteria, which is why working with a broker is essential to identify the most suitable lender for your needs.

How do I get the lowest rate on a self-employed mortgage?
Securing a low rate when you’re self-employed can be challenging, as lenders may view your income as less predictable. However, a broker who specialises in self-employed mortgages can help present your application in the best light, maximising your chances of approval.

Can I lower my mortgage rate if I’ve had bad credit?
Yes, though it may be more challenging. A mortgage broker with experience in bad credit cases can help you find a lender that’s more flexible and willing to offer competitive rates despite your credit history.