Rate

STEP ONE:
Choose your rate. It’s the crucial first step and you need to choose between fixed, discount or tracker deals. We’ve got loads more information on these on some of our sister websites, which you can link to at the end. Fixed rates tend to be best choices for people who are borrowing a lot of money are would struggle if interest rates went up in the next few years. That’s why they are often recommended for first-time buyers who may get plenty of other unexpected bills in their new lives as homeowners. Shop around for the lowest rates as these vary hugely – researcher Moneyfacts shows that there can often be a staggering 1.5 per cent difference between the cheapest and most expensive five year fixes. Pick the high rate and that’s £125 a month down the drain.

If you want a discount deal you need to take just as much care. Our sister website www.discountmortgages.co.uk gives a lot more information and says how important it is to focus on the rate you will pay on your mortgage, not the size of the discount. A big discount from a high standard rate can be a lot more expensive than a small discount from a more competitive start point. It’s the same with mortgages that track Bank of England base rate. Focus on the rate you will be paying – and make sure you can afford a little more in case interest rates go up before selecting the deal.