Put two mortgage deals side by side and it's the interest rate that first grabs your attention. It's front and centre on every comparison table, and it's easy to assume the lowest one wins.
But the rate doesn't tell you everything. A lower rate can come with a hefty product fee, while your LTV, deal length and early repayment charges can shift the numbers again. Two deals that look almost identical at first glance can end up costing you very different amounts.
So, when you compare mortgage deals, look beyond the rate. Check the fees, APRC, LTV and deal length, then work out what you'll actually pay over the time you expect to hold the deal. That's when you start seeing which deal really makes sense for you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This article is for general information only and isn't personal financial advice.
If you want to see the current market, you can compare live mortgage deals using a dedicated tool.
The headline rate tells you what interest you'll be charged, but not what the mortgage will cost you as a whole. It doesn't factor in the fees that come with the deal, and it doesn't tell you what happens once the initial deal period ends.
That's where the APRC comes in. The Annual Percentage Rate of Charge is the overall cost of a mortgage expressed as a single yearly percentage, including interest and most fees, calculated over the full term.
It's handy for getting a broader view, but it isn't the whole answer either. We'll get into its limits below.
A good comparison looks at more than one number. We've grouped these into six factors that work together to determine both the cost of a deal and how it behaves over time. Run through them in order, because each one affects the ones that follow.
Not all rates behave the same way, and that shapes how your monthly payment moves. A fixed rate locks your repayment amount for a set period, so you know exactly what you'll pay each month.
Trackers follow the Bank of England base rate instead, moving up and down with it, usually at a set margin above it. Discount deals offer a set discount off the lender's SVR, the lender's default interest rate, which can change at any time. Lenders cap or floor these discounts differently, so it is important to check the specific terms.
Your monthly payments could go up or down. That uncertainty is the trade-off for a potentially lower starting rate.
The main types of mortgage covers this in more depth, including how a standard variable rate works.
Length is as much a personal call as a financial one. A shorter fix, say two years, lets you look at your options again sooner if rates move in your favour. You'll also need to remortgage more often, so you'll be dealing with the paperwork, fees and hunt for a new deal more regularly.
A longer fix gives you more certainty. You know what your rate will be for longer, and you won't have to think about remortgaging again quite so soon. But if your plans change and you need to leave the deal early, the early repayment charge can be higher.
Two and five years are the most common, but three-year and ten-year products exist too. Many borrowers pick a 5-year fix for stability. Others prefer the flexibility of a shorter term.
Your own plans matter here too. You might move, expect a change in income, or be coming off a scheme like Help to Buy. Our 2-year vs 5-year fixed rates guide goes into this trade-off in more detail.
A seemingly cheap rate can quietly get expensive. Here are the main fees to check:
Is it better to take a slightly higher rate to avoid the product fee? The way to answer it is arithmetic. What matters is whether the lower rate saves you enough to make the fee worthwhile.
Say Deal A has a lower rate but a £1,000 product fee, while Deal B has no fee but a slightly higher rate. If Deal A saves you £20 a month over a 24-month fix, that's £480 saved on your repayments, which doesn't make up for the £1,000 fee.
In this example, Deal B works out cheaper. But change the loan size or how long you hold the deal and the maths can tip the other way. That's why the lower rate doesn't always mean the cheaper deal.
These figures are illustrative examples only and are not guaranteed borrowing amounts. The amount you may be able to borrow depends on factors including your income, regular spending, credit history, deposit size, and lender affordability checks.
For more on what you might pay, see mortgage fees explained.
We've mentioned the APRC already, so let's look at it properly. This rolls the interest rate and most fees into a single yearly percentage, calculated over the full mortgage term. It's meant to help you compare deals on a consistent basis.
But the APRC has blind spots. It doesn't reflect overpayments, portability, product-transfer options, or the early repayment charges you'd pay if you left partway through.
Crucially, APRC assumes the mortgage moves onto the lender's follow-on rate once the initial period ends. In reality, many people remortgage or switch to a new deal instead, which is why two mortgages with similar APRCs can still work out very differently in practice.
Treat the APRC as one signal among several, not the deciding factor.
LTV is the percentage of your property's value that you borrow. For example, a £180,000 mortgage on a £200,000 home is a 90% LTV.
Lenders price deals in LTV bands, often at 60%, 75%, 80%, 85%, 90%, and 95%. And the band you fall into can make a real difference. Dropping from 90% to 85% LTV can change the range of deals available to you.
In fact, a small extra deposit that pushes you into a lower LTV band can sometimes tip the balance more than shopping between lenders at the same LTV. The deals available in each band depend on the lender and your circumstances.
Use a mortgage calculator to work out your LTV and see where you land.
An ERC is a fee some lenders charge if you repay your mortgage early. That can happen if you sell your home before the deal ends, switch to another lender, or overpay above your allowance.
ERCs typically taper by year of the deal, but they vary by lender and how early you exit, so check your specific mortgage terms.
Portability is the other feature to look at here. Many mortgages are portable, meaning you can take the deal with you when you move. But portability isn't automatic. It's subject to a fresh affordability assessment and the new property meeting the lender's criteria.
Rates are useful, but it's also worth looking at what you'll actually pay during the initial deal period. As a starting point, you can compare your monthly repayments and the fees associated with each deal, minus any lender cashback.
For example, say Deal A has rate X with a £999 fee, while Deal B has a slightly higher rate but no fee. The monthly repayment is £900 on Deal A and £930 on Deal B, both over a 24-month fix.
On this measure, you'd pay £279 less on Deal B during the initial deal period. But this calculation doesn't necessarily tell you which mortgage will cost less overall. Different interest rates can affect how much of your mortgage balance you've repaid by the end of the deal period, so it's also important to compare how much you'd still owe, alongside any other relevant costs and features.
Change the loan size or deal length and the comparison can change too.
Plug in your own figures to model your monthly repayment.
Comparison tables make mortgage deals look nice and easy to compare. Rate here, fee there, APRC next to it, maybe a monthly repayment too. But not everything that matters fits neatly into a table.
There are a few things you'll need to dig a little deeper for:
And no single comparison table necessarily shows you everything that's out there. Some deals are only available directly from lenders, while others are available through selected brokers.
A mortgage can suit you on day one and become a pain later if your plans change. Things like overpayment allowances, portability and product-transfer options determine how much flexibility you'll have once the deal is up and running.
These are the details to check before you sign:
So how do you actually compare two or three deals without getting lost in the numbers? Here's a simple way to do it.
The aim isn't to find one "winning" deal on a page. It's to find the deal that fits your circumstances.
The rate is the interest rate you'll pay during the initial deal period, the 2 or 5 years of a fixed rate, for example. The APRC is the whole-of-mortgage cost expressed as a single annual percentage, including most fees. It assumes the mortgage moves onto the lender's follow-on rate after the initial period ends, unless the initial fixed rate is higher.
Neither number on its own is the "true cost" of the deal you end up holding, since most people remortgage or switch when their initial period ends rather than rolling onto the SVR.
Not always. A high product fee can wipe out the savings from a slightly lower rate, particularly on a smaller loan or a shorter deal.
Also check whether the product fee is being added to the mortgage rather than paid upfront. If it is, you'll usually pay interest on that fee too, so the true cost creeps up even though the monthly figure looks unchanged.
To compare deals, look at what you'd pay in monthly repayments and fees during the initial deal period, taking account of any cashback.
For a fuller comparison, also consider how much you'd still owe at the end of the deal period, as well as any other relevant costs and features.
If you're remortgaging, the usual window is the last three to six months before your current deal ends. Many lenders let you lock in a rate that starts when your existing deal finishes.
And don't assume a shortlist stays fresh for long. Mortgage rates can change frequently, so deals you compared a week or two ago may already look different.
For more on getting the timing right, see our guide on when to start looking at remortgage deals
See what mortgage deals could be available to you, or chat with a Habito adviser to talk it through.
Options available to you will depend on lender criteria, affordability, and your personal circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Habito is authorised and regulated by the Financial Conduct Authority (FRN 714187).
Information is correct at the time of writing and may change. Always check the latest terms and conditions before taking out a product.
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