Best deals for home movers

When moving house, you’ll hopefully have a decent equity stake in the property you’re selling - so you’ll be in a strong position to secure a cheaper mortgage.

We’ve looked at the bank and building society market to find some of the best deals when buying your next home.

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We’ll be considering a £300,000 property purchase, borrowing at 60% loan to value (LTV) as the buyer has £120,000 from the sale of their previous home. They’ve chosen a 25-year mortgage term. 

Two-year fixes

It’s crucial to consider the overall cost of a mortgage, and not just focus on the headline rate. There are dozens of ultra-low fee deals, though in many cases buyers will end up paying more because of hefty product fees.

HSBC, up to 60% LTV, 1.54%
Fixed until 30 June 2019 then reverts to SVR (currently 3.69%)

This mortgage will cost £723 per month for the first two years, representing an annual cost of £8,793. The standard variable rate (SVR) is 3.69%, so repayments will jump after two years. No fees apply.

Skipton Building Society, up to 60% LTV, 1.55%
Fixed until 30 June 2019 then reverts to SVR (currently 4.74%)

This has a rate of 1.55%, meaning monthly payments equal £724 and the annual cost is £8,832. The product is fixed until 2019 and then reverts to the SVR, currently 4.74%. There are no mortgage fees.

Fix for longer

It’s possible to lock in a mortgage rate until 2027, which can ensure you know exactly what your repayments will be. These deals are cheaper than ever before, but the security of knowing what you’ll pay for a long period doesn’t come cheap – rates are much higher than with shorter deals.

Atom Bank, up to 75% LTV, 1.59%
Fixed until 30 June 2022 then reverts to SVR (currently 3.75%)

In the five-year fix market, Atom Bank leads the way. It is currently offering a rate of 1.59%, fixed until June 2022. There are £1,250 in up-front fees and an average monthly cost of £728 - equivalent to an annual cost of £8,966. Atom's SVR is currently 3.75%, meaning payments will leap when the fixed period expires.

First Direct, up to 60% LTV, 2.49%
Fixed for 10 years then reverts to SVR (currently 3.69%)

The cheapest 10-year fixed rate is available from First Direct at 2.49%, with just a £35 fee. That’ll cost £807 per month, £9,702 a year. When the fixed rate period ends in 2027 monthly repayments will increase, assuming rates don’t change and our buyer hasn’t switched to a better deal.

Variable rates

If you think the Bank of England’s base rate is likely to stay the same or fall then a variable rate could be for you. However, be aware that rates could rise at any time and leave you out of pocket.

Coventry Building Society, up to 65% LTV, 1.35%
Variable for term

Coventry Building Society currently has the cheapest variable rate at 1.35%. Monthly repayments are £707 with initial fees of £999 – this represents an annual cost of £8,537.

Interest-only deals

If you’re looking for interest-only options, remember the rules are now a lot stricter and you’ll need to show a well-thought out plan for repaying the capital at the end of the mortgage. Monthly repayments are much lower than with capital repayment, but you'll pay more interest on an interest-only mortgage in the long run.  

Not every provider will lend on an interest only basis, so if you’re looking for one it’s best to speak to a mortgage broker.

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