How to Get the Best Mortgage Rates

Frankie at Planet Mortgages

23 September 2021
By Frankie

If you're searching for a mortgage deal to help you secure your dream home, then we can help. Read more to find out about mortgage rates and how to secure the best one.

Mortgage broker helping clients
A mortgage rate is the interest charged on a mortgage. These rates are determined by the lender and can either be fixed or variable. With a fixed rate mortgage, your interest rate is fixed for a certain amount of time. Whereas a variable rate mortgage means that interest rates can fluctuate each month. This means that your monthly repayments are subject to change. If you’re keen on learning more about interest rates, you can read more here. 

Managing to get a good deal on your mortgage rate is hugely beneficial as it has the potential to save you thousands of pounds each year. A mortgage broker will work with a range of lenders, have a great deal of inside information and have access to exclusive broker-only deals. After discussing the different options available to you, a broker will aim to obtain the best possible deal with the most suitable terms and interest rates.  

Here are some of our top tips when it comes to getting the best mortgage rates… 

Improve Your Credit Score and Credit Report

If you’ve begun looking into mortgages, you’ll most likely have noticed the terms credit score and credit report being used frequently. Both your credit score and credit report can be a factor in determining the rate on your mortgage. A lower credit score could indicate to mortgage providers that you may default on mortgage payments which means they might decide to charge you a higher rate of interest to cover any risk. In contrast, a high credit score could provide lenders with assurance that you’ll be able to make your repayments on time. As a result of this, mortgage providers are more likely to offer you a better rate. A mortgage broker will be able to talk you through your options after assessing your credit score and financial situation. 

Save a Large Deposit 

When you have a larger deposit you’ll be eligible for more competitive mortgage deals with lower interest rates. This is because the bigger the deposit, the less money you’ll need to borrow. With this in mind, the lender will usually perceive you as less of a credit risk. To determine the interest rate, most lenders categorise mortgages according to their loan-to-value (LTV). A loan-to-value is the ratio of what you loan as a mortgage against how much you put down as your deposit. Lenders look more favourably on a lower LTV which means the more you put down as a deposit the lower the LTV will be. 

Shop Around 

Whilst it might be tempting to stick with your bank when taking out a mortgage, it’s a good idea to shop around to ensure that you’re getting the best deal. From big, high-street banks and well-established building societies to smaller, more niche lenders, you’ll find that there’s a wide range of mortgage providers out there. Each will have their own products, services and unique deals on offer. Taking out a mortgage is one of the biggest financial commitments that most people will ever make. So, it’s important that you check out all of the deals and their terms thoroughly before making your final decision. This can be a tough, time-consuming process which can often feel overwhelming. A mortgage broker can take away this stress by utilising their expert knowledge, market insights and inside connections. 

Use a Mortgage Broker 

A mortgage broker will gather information that builds a picture of your financial situation and personal preferences. They will use this information to find the best possible mortgage deals and interest rates. Mortgage brokers have access to a range of exclusive, broker-only deals and have expert knowledge of the mortgage market. They’ll also be able to advise you on which lenders are more likely to accept your application. This can help you avoid a rejection appearing on your credit report which could impact future applications. 

Here at Planet Mortgages, we go above and beyond to ensure that our clients get the best mortgage deal possible. Get in touch with one of our friendly, experienced team members and let us help you land your dream home.