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Which lenders are currently offering the lowest mortgage rates?

lowest mortgage rates

The Bank of England dramatically cut their base rate earlier this year, due to emergency Covid19 measures, so now is the ideal time to try and secure the lowest mortgage rates for some time. 

Whether you are a first-time buyer or you’re looking to remortgage your home, there are relevant products available at great rates – we’ve taken a look at some of the best deals on the market right now depending on your situation.

Lowest mortgage rates for first time buyers

Small deposit (95% LTV)

These days most lenders will expect first time buyers to put down a deposit of at least 10% of the property value. However there are a small number of lenders, usually accessed via a mortgage broker, who offer deals that require a deposit of just 5%.

One such lender is Furness Building Society who currently have one of the lowest mortgage rates around for first time buyers on a 95% LTV with a two-year fix at 3.29% APR.1

Average deposit (90% LTV)

Being able to offer the typical deposit of at least 10% of the property value starts to open up more of the lowest mortgage rates, particularly those that are available on the high street.  

HSBC is currently offering a two-year fix for first-time buyers at 2.44% which comes with a product fee of £999.00.    If you didn’t want to pay a product fee upfront, they have an alternative deal which doesn’t come with a fee at 2.69%.2

Large deposit (80% LTV)

If you are lucky enough to be able to offer a larger deposit, equating to 20% of the property value then this will open up much lower rates.  The more equity you can inject into the property initially, will give lender’s much more confidence in you as a borrower.

One of the lowest mortgage rates for first-time buyers with a larger deposit is from Natwest. This comes in at a rate of 1.41% with a product fee of £995.00.3

Lowest mortgage rates for remortgaging

We’ve based the following results on those who are remortgaging with at least 60% LTV.  Typically, borrowing at 60% LTV will open up the best rates available, so if you are looking to secure the lowest mortgage rates around then you’d be wise to ensure that there is enough equity in your home to be able to secure one of these deals.

2-year fixed rate

If you want an element of flexibility and don’t want to be locked into a deal for too long (perhaps you are thinking about moving home in the near future) then a two year fix could be suitable.  Giving you just the right amount of security, but knowing that you can change to a new deal in a relatively short space of time.  

HSBC are currently offering homeowners an APR of 1.14% if you are willing to pay a product fee of £999.00 upfront.4

5-year fixed rate

If you are looking to fix your payments for longer, giving you a little extra security from rising rates, and knowing just how much you will be paying each month, then a longer term fixed rate could be worth considering.

HSBC is top of the tables again with a rate of just 1.31%, however this does come with a product fee of £1499.00.5

If you’re looking to avoid the product fee, then Virgin Money are offering their five-year fix at 1.75%.6

The above products are just a small sample of what’s currently on offer and have simply been chosen based on the lowest mortgage rates.  However you should always ensure that you read the terms and conditions of the mortgage, and calculate the overall cost – including any fees – over the term of the mortgage.  There may be mortgages available that are better suited to your circumstances.

Finding the right mortgage can be a daunting process with so many products available on and off the high street.  Speaking to a mortgage broker could help you find the most suitable deal for your particular requirements.  

Speak to a mortgage specialist at So Smart Money today and discover the available deals. 


The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

1 Rate is based on 95% LTV.  Calculated on a mortgage of £171,000 against a property value of £180,000.  2-year fixed rate. No product fee.  Initial payment of £836.93.

2 Rate is based on 90% LTV.  Calculated on a mortgage of £162,000 against a property value of £180,000.  2-year fixed rate.  Initial payment of £721.87 (2.44%) with a product fee of £999.00 or £742.36 (2.69%) with no product fee.

3 Rate is based on 80% LTV.  Calculated on a mortgage of £144,000 against a property value of £180,000.  2-year fixed rate.  Product fee £995.00. Initial payment of £569.84.  

4 Rate is based on 60% LTV.  Calculated on a mortgage of £108,000 against a property value of £180,000.  2-year fixed rate.  Product fee £999.00.  Initial payment of £413.90.

5 Rate is based on 60% LTV.  Calculated on a mortgage of £108,000 against a property value of £180,000.  5-year fixed rate.  Product fee £1499.00.  Initial payment of £422.36.

6 Rate is based on 60% LTV.  Calculated on a mortgage of £108,000 against a property value of £180,000.  5-year fixed rate.  No product fee.  Initial payment of £444.73.

Prices correct Aug 2020

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