With the vast sums of money required to buy a home these days, coupled with the increasing cost of living, there has never been a better time to ensure you get the right mortgage deal. This article provides help and guidance to give you the best chance of securing the right mortgage deal

How to get the best interest rate on a mortgage

The key factors that determine the mortgage products available to you;

  • Choosing a suitable mortgage product 
  • Choosing the right mortgage provider 
  • Lowering your risk the the lender 
  • Timing

Choosing a suitable mortgage product 

A mortgage broker can assist you in sourcing a mortgage deal from either the entire market or a select panel of lenders, providing you with a better chance of choosing the best deal. 

By working with a mortgage broker who has experience in the specific type of mortgage you are seeking, you can increase your chances of success with your application and securing the most favorable deal. Their expertise and knowledge of the market can be invaluable in navigating the complex mortgage landscape and finding the best mortgage terms and rates that align with your financial goals.

While opting for the lowest interest rate may appear attractive, it’s crucial to consider other factors when choosing a mortgage deal. Additional costs, such as mortgage arrangement fees and survey fees should be taken into account. 

Additionally, it’s essential to assess if the mortgage term aligns with your plans and future financial goals. Factors such as the length of the term, flexibility in making additional payments, and potential penalties for early repayment should all be considered

Reducing your risk

Mortgage lending and pricing are heavily influenced by risk factors. Taking steps to mitigate these risks can increase your chances of securing the best mortgage deal. Some actions that can help improve your chances include:

  • Improving your credit score: A higher credit score demonstrates your creditworthiness to lenders and can result in more favorable mortgage terms and rates.
  • Increasing your deposit: A larger deposit can reduce the loan-to-value (LTV) ratio, which can result in better interest rates and loan terms.
  • Reducing your borrowing amount: Borrowing less can lower the risk for lenders and may result in more favorable mortgage terms.
  • Decreasing your debt-to-income ratio: A lower debt-to-income ratio (DTI) shows lenders that you have better financial stability and can handle mortgage payments more comfortably.
  • Adding another applicant or guarantor: Adding another applicant or a guarantor with a strong credit profile can help improve your chances of getting approved for a mortgage or securing better terms.
  • Demonstrating stability in employment: A stable employment history can positively impact your mortgage application, as it shows lenders that you have a reliable source of income to repay the loan.
  • Timing with interest rates: Keeping an eye on market trends and timing your mortgage application when interest rates are favorable can result in better mortgage terms and rates.

Taking steps to reduce risk and demonstrate financial stability can significantly improve your chances of securing the best mortgage deal. 

Personal timing 

timing your mortgage application based on your own personal circumstances, such as having a sufficient deposit, can greatly impact the mortgage deal you can secure. 

Shop around 

shopping around and comparing offers from different mortgage lenders and brokers can help you find the best deal that meets your needs and financial situation.

Government schemes 

It’s also important to explore any government schemes or incentives that may be available to you, such as first-time buyer programs or Help to Buy schemes, which can provide additional benefits or assistance in securing a mortgage.

Work with a mortgage broker 

Working with a mortgage broker can save you time and money, as they have access to a wide range of mortgage products and can help you navigate through the complex mortgage market. A mortgage broker can provide expert advice tailored to your individual financial situation and goals, and help you find the best deal that meets your needs in terms of interest rates, fees, and terms.

Mortgage brokers can also handle the paperwork and negotiations on your behalf, saving you time and effort in the mortgage application process. They can assess your financial situation, help you understand the different options available, and provide recommendations based on your specific requirements.