The lowest advertised rate and the cheapest mortgage for you are often two different products. Lenders price in bands based on your loan-to-value, and a headline rate ignores arrangement fees, incentives and what happens when the deal ends. This guide explains what actually decides the rate you are offered, and how to compare deals on total cost rather than the number in the advert.
Mortgage rates move constantly, in response to the Bank of England base rate, swap rates and competition between lenders. Any figure written into a guide is out of date within weeks, and a rate you cannot actually get is worse than no rate at all.
What does not change is what determines the rate you are offered, and that is the more useful thing to understand. For a current figure for your circumstances, ask us — it takes a few minutes and costs nothing.
Lenders price in bands rather than on a sliding scale. The ones that matter are typically 95%, 90%, 85%, 75% and 60%. Crossing a threshold moves you into a cheaper tier; getting close to one without crossing it achieves nothing.
This is the single biggest lever most borrowers have, and it is why being a small amount short of a band is worth knowing about before you make an offer. Our guide to how much deposit you need sets the bands out in full.
A clean file opens up mainstream lenders and their best pricing. Adverse credit does not rule you out, but it usually means a specialist lender and a higher rate. What matters is what the adverse entry was and how long ago — not a single score.
Worth knowing: there is no one credit score that UK lenders share. Each runs its own assessment, which is why one can decline you and another accept you on the same information.
Stable, evidenced income and outgoings that leave comfortable room for the payment. Complex income is not a problem in itself but narrows the field of lenders.
Two-year fixes, five-year fixes and trackers are priced differently, and the gap between them changes with market conditions. Neither is automatically cheaper.
A fixed rate holds your payment steady for a set period, usually two, three or five years. You are paying for certainty.
A tracker or variable rate moves, usually following the Bank of England base rate. It can start lower, and it can rise.
Which is cheaper over the term depends entirely on what rates do next, which nobody knows. The honest framing is not which is cheaper but how much payment uncertainty you can comfortably absorb. If a one percentage point rise would cause you real difficulty, that is an argument for fixing regardless of what the comparison looks like today.
Also worth weighing: early repayment charges are usually steeper on longer fixes, so a five-year fix is a worse fit if you might move or repay early.
This is the part that costs people money, so here is what it looks like with numbers.
Take a £200,000 mortgage over 25 years, comparing two five-year fixes:
Deal A looks clearly better: it is the lower rate and saves £28 a month. Over the five-year fixed period that is £1,680 saved on payments — but the fee is £1,999. Deal B, the higher rate, is roughly £319 cheaper over the five years.
Illustrative figures only, to show the principle rather than current rates, and ignoring the small difference in how much capital you repay over the period. Which way round it falls depends on the loan size: on a larger mortgage the rate saving grows while the fee stays fixed, so the low-rate-plus-fee deal starts winning.
That last point is the whole lesson. The answer flips depending on how much you are borrowing, which is why a league table of rates cannot tell you which deal is cheapest for you.
They are useful for a general sense of the market. Their limits are worth knowing:
A rate you do not qualify for is not a rate. The useful question is not "what is the lowest rate advertised" but "what is the lowest rate I will actually be offered".
Our guide to what lenders do not want to see covers the preparation in detail.
What is a good mortgage rate in the UK?
It depends on your loan-to-value, your credit history and the day you ask. Rather than a number, the useful benchmark is whether you are getting the best rate available to you at your LTV band — which is what we check.
Who offers the lowest mortgage rates?
It changes constantly, and the lender with the lowest headline rate is frequently not the one that will accept you or be cheapest overall once fees are counted. The best lender for you depends on your circumstances rather than on who is top of a table this week.
Is a lower rate always cheaper?
No. A lower rate with a large arrangement fee can cost more than a higher rate with no fee, particularly on smaller loans. Compare the total cost over the deal period.
Should I fix or track?
Fixing buys payment certainty; tracking may start cheaper but can rise. The deciding question is usually how much of a payment increase you could absorb without difficulty.
How can I get a lower rate?
The most effective route is a lower loan-to-value, by putting down more deposit or benefiting from a rise in your property's value. After that: a clean credit file, no recent credit applications, and applying to a lender whose criteria you actually fit.
Does using a broker get me a better rate?
Not automatically, but a broker can see products that are only distributed through intermediaries, and can tell you which lender is likely to accept you — which avoids collecting declines and hard credit searches along the way.
We are an independent, whole-of-market mortgage broker at Beehive Works in Sheffield, authorised and regulated by the Financial Conduct Authority (FRN 650114). We compare on total cost rather than headline rate, and we will tell you when your existing lender's offer is the better deal.
Start with our borrowing calculator, read about remortgage timing if your deal is ending, or see our Sheffield mortgage advice.
Your initial consultations and discussions with your adviser are free, and our fees are set out in full before you commit to anything.
Call 0114 303 1031, email info@friendscapital.co.uk, or get in touch through the website.
Last updated 6 October 2026. Your home may be repossessed if you do not keep up repayments on your mortgage.