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.

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. 

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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.

Platform, up to 60% LTV, 1.73%
Fixed until 30 April 2019 then reverts to SVR (currently 4.74%)

For a cashback option, consider the Platform's fixed rate deal which offers £250 in cashback. This has a rate of 1.73%, meaning monthly payments equal £740 and the annual cost is £8,851. The product is fixed until 30 April 2019 and the rate reverts to the SVR at this point, currently 4.74%. Platform products are only available through mortgage brokers.

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 long-term deals are cheaper than ever before, but the security of knowing what you’ll pay for a decade doesn’t come cheap – rates are much higher than with two-year deals.

HSBC, up to 60% LTV, 1.94%
Fixed until 30 June 2022 then reverts to SVR (currently 3.69%)

In the five-year fix market, HSBC leads the way. It is currently offering a rate of 1.94%, fixed until June 2022. There are no fees and an average monthly cost of £758. HSBC's SVR is currently 3.69%, 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. 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 75% 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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