Is it possible to compare different mortgage deals?

The short answer is ‘Yes’. And the good news is that there is likely to be a mortgage suitable for you.

Hundreds of different mortgages are available though, and comparing them isn’t always easy.

As it’s not all about the figures – and it is about your life for years to come – make sure you ask all the questions you need to and understand the answers you are given.

Get your paperwork in order before you have your meeting and prepare some questions so you don’t forget them. 

Seven questions to ask:
  • The initial interest rate and when it ends.
  • What the interest rate will be after the initial period.
  • What the monthly payments will be during and after the initial period.
  • Are there penalties for leaving the deal?
  • Can I overpay each month?
  • Is there a fee if I pay my mortgage off early?
  • Are there any fees? Can I pay these upfront or are they added to the loan?
If you’re not sure why the mortgages you are looking at are the most suitable, ask why.

Building societies and banks are all in competition to win your mortgage business and to attract you they offer a variety of their own deals. See our guide to different types of mortgage for more on this.

There are different scenarios – from the amount you want to borrow, to the value of your home and the period of time you want to borrow money for.

This makes picking out the best mortgage for you and comparing like for like difficult. Add to that whether you want to fix your payments at a set figure for several months, you’ll see how the number of options is vast. If you find you have a poor credit score, this will again change things for you.

When it comes to your actual choice, low interest rates can be negated by an arrangement fee.

And it’s not always the cheapest monthly payment that will dictate which mortgage you choose. 

Lenders use a figure called the Annual Percentage Rate of Charge (APRC) to help you compare mortgages. It includes any additional fees in your mortgage deal such as valuation or redemption costs and is the total cost of credit, shown as an annual percentage. 

Because all lenders calculate and express this in the same way, you can compare them.

Mortgage broking senior manager Ian Gibbons, of Nottingham Mortgage Services, said: "You need to be careful when comparing mortgages purely on APRC, initial rate or fees, and be wary of online price comparisons because all of these methods assume you meet all eligibility criteria for that scheme. 

“Customers can fall slightly short on the amount of deposit available, income or affordability criteria, the type of property, the construction and a whole host of other criteria small print. 

“This is where it’s best to speak to a broker who knows how to navigate around the criteria and can ask you lots of questions about your future plans and who can then find you the best deal to suit all of your needs, rather than opting for the one that looks like it’s got the best APRC.”

Make sure the lender fully explains all the charges and fees, and whether you’re tied in to a deal that would cost money to leave.

Last updated on:

Sign up to our newsletter

We regularly send out newsletters with product information, advice on improving your finances and top tips. If you would like to receive this please sign up to our newsletter, which you can unsubscribe from at any point.