Best Mortgage Rate

Determining the best mortgage rate is difficult as there is no single best rate to always go for but rather different rates for different circumstances. The rate which suits your circumstances is going to be the best one for you. There are seven interest rate options to choose from, these are standard variable, standard variable with cash back, tracker, fixed, discount, capped and the London InterBank Offered Rate otherwise known as the LIBOR. Each of these options will influence the APR set on your mortgage which will be a large influence on the amount you pay back to your provider.

The Rates Explained

All of these online mortgage rates are guided and influenced by public banking rates but they will all have different details to them which mean they will come up with a different APR for a mortgage. Standard variable means that the bank or building society providing the loan can decide what the APR on your mortgage is, this will usually be above the country's public banking rates but can go up or down based on what your lender thinks is best. Standard variable with cash back is the same however the lender is also given a lump sum of cash along with the loan which you can spend on what you want. This cash is added to the money you have already borrowed from your provider. The tracker option is similar to standard variable but your APR will only go up and down if the official bank rate does.

The advantage of this is that your provider is not able to raise your APR as and when they wish like they can do with standard variable. A discount option will be the APR you get from a providers standard variable option, but it will be discounted for a set period of time. The fixed option means that your APR will not go up or down for a certain period of time which will be agreed on by your provider. A capped option means that your APR cannot go above a certain number for a set period of time. Finally the LIBOR option means that your APR is influenced by the daily rate that banks in London are set when they are lending and borrowing from one another.

Which One Is Best

The best mortgage rate out of these seven will be dependent on a few factors that you should take into account before you make your decision on which one to go for. The state of the country's economy and what the level of public interest rates are during the time you decide to get a loan is going to have an effect on which option is best for you. To get the best mortgage rate you also need to know the other details of your mortgage, so things like how much you are borrowing, how long you are going to take to repay your provider and what your repayment method is going to be, should all be worked out to enable you to get the best mortgage rate. For example if have a short payback period and you have a capital repayment plan, meaning you pay back your loan and the interest on it at the same time in monthly instalments, then perhaps the discount or capped option is the best mortgage rate for you. On the other hand if public interest rates are low and mortgage providers are being cautious and are giving borrowers high rates on their mortgages perhaps you should go for the tracker or LIBOR option instead.

Talk To Impartial Advisers

All of this may seem like a lot to take on board so one of the best ways to work what the best mortgage rate is, is to talk to an impartial adviser. An impartial adviser will be able to think about the details of your mortgage, the state of public interest rates, and your income and projected future income and come up with some helpful advice on what your best mortgage rate is. As these advisers specialise in talking to people about mortgages every day, they are not going to baffle you with jargon and will be able to explain everything to you in simple and understandable language.

Once you feel confident enough that you know what your best mortgage rate is get your application into the bank or building society who is offering the loan. You can do this online, on the phone or in person if you want to. After a couple of weeks you should hear back from your provider with the news on whether you have been approved for the loan or not. So good luck and remember that thinking through everything in detail is going to help you get the best mortgage rate you can.

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