Best deals for home movers

Published by Adam Williams on 29 July 2015.
Last updated on 21 November 2017

See the best mortgage rates around to help you move up the property ladder.

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. These picks are our Moneywise Best Buys.

Our example buyer is considering a £300,000 property purchase. They are 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.

Best two-year mortgage 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.

Yorkshire Building Society, up to 65% LTV, 1.21%
Fixed until 29 February 2020, then reverts to SVR (currently 4.99%)

This has a rate of 1.21%, meaning monthly payments equal £696 and the annual cost is £8,730. The product is fixed until 2020 and then reverts to the SVR, currently 4.99%. There are £765 fees and no cashback on offer.

Barclays, up to 60% LTV, 1.49%
Fixed until 31 January 2020, then reverts to SVR (currently 3.99%)

This mortgage will cost £719 per month for the first two years, representing an annual cost of £8,748. The standard variable rate (SVR) is 3.99%, so repayments will jump after two years. There are no fees with this product.

Fix your mortgage 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.

NatWest, up to 60% LTV, 1.79%
Fixed until 29 February 2023, then reverts to SVR (currently 3.99%)

In the five-year fix market, NatWest leads the way. It is currently offering a rate of 1.79%, and there are £997 in fees after cashback. This gives an average monthly cost of £745 - equivalent to an annual cost of £9,100. The SVR is currently 3.99%, meaning payments will leap when the fixed period expires.

TSB, up to 60% LTV, 2.34%
Fixed until 31 January 2028, then reverts to SVR (currently 3.99%)

The cheapest 10-year fixed rate is available from TSB at 2.34%, with £1,445 in fees. That’ll cost £793 per month, £9,656 a year. When the fixed rate period ends in 2028 monthly repayments will increase, assuming rates don’t change and our buyer hasn’t switched to a better deal.

Variable rate mortgages

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.

Principality Building Society, up to 65% LTV, 1.3%
3.44% discount until 31 January 2020, then reverts to SVR (currently 4.74%)

This is currently the cheapest variable deal at 1.3%. Monthly repayments are £703 with no fees - this means an annual cost of £8,627.

Interest-only mortgage 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. Our mortgage tool can help you get a feel for the rates on offer.

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Call free on 0800 073 1936 or see mortgage best buys online.