How to Find a Mortgage
Don't: Use Banks and Estate Agents
Don't be tempted to only talk to your current account or existing mortgage provider because you like the familiarity of your own bank. Bank staff are effectively salesmen and are only interested in flogging their own deals. They will not be able to offer you a whole-of-market comparison to find the cheapest mortgage. So your loyalty could cost you tens of thousands of pounds if you miss out on the lowest mortgage rate simply because it was offered by the bank next door. You should also be wary of estate agents pressurising you into making an appointment with their mortgage advisor. You don’t have to do this. Most advisors tied to estate agents have a limited panel of lenders, so they will not be able to scour the whole market to find you the best deal. It’s best to avoid these advisors and find a mortgage yourself.
Do: Use Comparison Websites
Comparison websites are a quick and easy way of sussing out the best mortgages. Our mortgage tables compare 99% of the market, so are an excellent starting point. When you use a comparison website you'll be confronted with a mortgage best buy table that can appear confusing at first glance. But, if you work out the following beforehand you will find the tables easier to navigate:
- The loan-to-value you need. This means the mortgage as a percentage of the property value. For example, if you were buying a £100,000 home with a £25,000 deposit, you would need a mortgage of £75,000. This means your loan-to-value would be 75%.
- Whether you want afixed,tracker or discount mortgage
- How much of an arrangement fee you can afford to pay
You can find out more about all these decisions in our beginner's guide to mortgages.
Use a Broker
Comparison websites provide a good benchmark, but you may also wish to approach a mortgage broker who can double check the market for you, and process your application with the lender. Brokers are particularly useful if you would otherwise struggle to find a mortgage – for example if you are self-employed, have a small deposit or a bad credit history. A good broker will know which lenders will be most likely to accept your application. There are generally two types of brokers, and you should always find out which type you’re dealing with:
- Those who charge no fee and check most of the market. They make their money from the commission payments they receive from lenders, but that means they don't compare the whole market - only the providers who pay commission.
- Those who charge you about £200 and check the whole market.
The best way to find a mortgage broker is through personal recommendations so try asking friends or neighbours. If that doesn't turn up anything you can find directories of qualified, regulated brokers at Unbiased or recommended ones here.
Use a Comparison Website AND a Broker
Buying a house is expensive at the best of times, so you may not want to spend more money on a mortgage broker. If that’s the case, you should use a combination of comparison websites and a fee-free broker to find the best deal.