Mortgage Rate Information - A Mortgage Now independent mortgage advice online Thu, 03 Jul 2025 10:26:16 +0000 en-GB hourly 1 https://amortgagenow.co.uk/wp-content/uploads/2020/06/a-mortgage-now-icon-mse-72dpi-1.jpg Mortgage Rate Information - A Mortgage Now 32 32 2 or 5 year fixed mortgage https://amortgagenow.co.uk/blog/2-or-5-year-fixed-mortgage/ Thu, 03 Jul 2025 10:26:15 +0000 https://amortgagenow.co.uk/?p=19959 Deciding between a 2 or 5 year fixed mortgage rate depends on your financial goals, your market outlook, and your personal circumstances. Below we outline the key things to consider (remember, your mortgage broker is always here to guide you): 2 or 5 year fixed mortgage and Interest Rate Environment Falling Rates: If mortgage rates ... Read more

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Deciding between a 2 or 5 year fixed mortgage rate depends on your financial goals, your market outlook, and your personal circumstances.

Below we outline the key things to consider (remember, your mortgage broker is always here to guide you):

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2 or 5 year fixed mortgage and Interest Rate Environment

Falling Rates: If mortgage rates are expected to fall in the medium term, a 2 year fixed mortgage rate may be better. You’ll be able to remortgage sooner at a potentially lower rate.

Rising Rates: If mortgage rates are expected to rise, locking in a 5 year fixed mortgage rate could protect you from increases and provide cost certainty.

2 or 5 year fixed mortgage and Cost and Monthly Payments

2 year fixed mortgage rate: Typically comes with slightly lower rates than five-year terms – this means lower initial monthly payments.

Unusually, and following the market volatility in 2022, (two year fixed mortgage rates are currently pricing over five year fixed rates)

5 year fixed mortgage rate: May have a higher rate, but provides long-term payment stability.

Your Future Plans

2 year fixed mortgage rate:

  • Suitable if you might move, sell, or refinance in the near future
  • With a shorter commitment comes increased flexibility

5 year fixed mortgage rate:

  • If you’re settled and want stability for the medium to long term
  • Less hassle with less frequent renewals

2 or 5 year fixed mortgage and Penalty Risk

Breaking a 5 year fixed mortgage rate early often involves higher penalties than breaking a 2 year fixed mortgage rate.

If there’s a chance you will need to break the mortgage early (job change, divorce, upsizing), a 2 year fixed mortgage rate might be safer.

2 or 5 year fixed mortgage and Renewal and Market Exposure

2 year fixed mortgage rate: If you are the more adventurous type, you will renew more frequently, which could be good or bad depending on market conditions.

5 year fixed mortgage rate: If you are the more cautious type, you are shielded from market volatility for a longer period, which provides peace of mind.

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2 or 5 year fixed mortgage and Flexibility vs. Stability

2 year fixed mortgage rate

Pros

  • More flexibility
  • Lower early repayment charges if rate exited early

Cons

  • More frequent renewals
  • Potential rate risk

5 year fixed mortgage rate

Pros

  • Payment stability
  • Longer protection form rate increases

Cons

  • Higher early repayment charges if rate exited early
  • Less flexible

2 or 5 year fixed mortgage – Sub Accounts

If you have taken additional borrowing since your mortgage started you will likely have sub accounts on your mortgage account.

For example, a borrower with initial borrowing of £250,000 and a £50,000 top up later will have one large and one small sub account which, since they were taken at different times, on different rates, will be on mortgage rates that end at different times. This can increase the complexity and cost of selected new mortgage rates or re-mortgaging. It is therefore beneficial to bring your mortgage sub account rates timings into line with each other.

This can be a factor in the decision for a 2 or 5 year fixed mortgage rate on a sub account.
3 year fixed mortgage rate options can be especially useful for this.

2 or 5 year fixed mortgage – Summary and Decision Guide

Choose a 2 year fixed mortgage rate if:

  • You anticipate changes in your life or finances
  • You expect interest rates to fall
  • You value short-term flexibility
  • You are keen obtain lower mortgage rates when available

Choose a 5 year fixed mortgage rate if:

  • You want predictable payments and long-term stability
  • You expect interest rates to rise
  • You’re planning to stay in the property for at least 5 years

 
If you have any concerns about whether to choose a 2 or 5 year fixed mortgage rate, speak to your mortgage broker.

call us now on 0208 979 9684

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]]> Mortgage Product Fees https://amortgagenow.co.uk/blog/mortgage-product-fees/ Thu, 05 Jun 2025 09:00:52 +0000 https://amortgagenow.co.uk/?p=19890 What are lender’s mortgage product fees? Lender’s mortgage product fees are fees charged by the mortgage lender at outset on a some mortgage products. These fees can be added to the mortgage lending, or paid upfront. A lender’s mortgage product fee offers these benefits to the borrower: A lender’s mortgage product fee offers these benefits ... Read more

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What are lender’s mortgage product fees?

Lender’s mortgage product fees are fees charged by the mortgage lender at outset on a some mortgage products. These fees can be added to the mortgage lending, or paid upfront.

A lender’s mortgage product fee offers these benefits to the borrower:

  1. Access to a lower interest rate
  2. Lower initial payments

A lender’s mortgage product fee offers these benefits to the lender:

  1. The income from the fee contributes to the cost of setting up the deal
  2. Using a mortgage product fee to maintain profit enables a lower interest rate to be quoted in comparison tables
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Should I take a rate with the lender’s mortgage product fee?

This is one of the most common questions that mortgage brokers handle. The answer differs in each individual case.

Key factors that indicate whether a lenders mortgage product fee is cost-effective are:

  1. The level of borrowing
  2. The saving in rate against fee size
  3. The mortgage term
  4. The rate term
  5. The mortgage repayment basis

Level of borrowing

The more you borrow, the more you save on a lower interest rate. Since most lender’s mortgage product fees are a set amount, the bigger your mortgage, the more attractive a reduced rate with the lender’s mortgage product fee may be.

Rate against fee size

Sometimes there is a big interest saving available for a modest fee. Sometimes the difference is so small there is little value in paying the lender’s mortgage product fee for the lower mortgage rate.

Mortgage term

This is a factor if the borrower intends to add the lender’s mortgage product fee to the borrowing. Interest will be charged on the mortgage product fee and over the length of the mortgage term this can be much more than the interest saving on the mortgage.

Product term

The longer you benefit from a lower interest rate, the more worthwhile it is to pay a lender’s mortgage product fee. Paying a fee to save on your interest rate over five years will be a very different calculation against paying a fee to save on your interest rate over two years.

Mortgage repayment basis

Most mortgages are set up on a capital repayment basis. Under this arrangement each monthly payment covers the interest on the loan and pays a little off of the capital owed.

Some mortgages, particularly those taken out by landlords on rented property (buy to let), are set up interest only. Under this arrangement each monthly payment covers the interest on the loan only and the capital is not repaid monthly. At the end of the mortgage term the lender will require the capital to be repaid in full.

Occasionally mortgages are set up partially on a capital repayment basis and partially interest only, this is known as a split repayment basis.

On an interest only mortgage where the capital owed is not reducing, the long-term cost of higher interest rates is greatly increased. This can make products with lender’s mortgage product fees more attractive.

Should I add my mortgage product fee to my borrowing?

An important thing to remember is that a mortgage product fee paid upfront incurs no further cost. A mortgage product fee added to your borrowing accrues interest for as long as it is on your mortgage account. This makes the mortgage product fee much more expensive over the long term.

We recommend that borrowers either, pay the lender’s mortgage product fee upfront, or if added to the lending, pay it back over the term of the mortgage product.

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How do I know if a mortgage rate with a mortgage product fee is beneficial to me?

Your mortgage broker can assist you to establish which mortgage product is most cost effective for you given both the interest rate and fees charged.

Very often, the difference between a lower priced rate with the fee charged, and a higher-priced rate with no fee is minimal. The more you are borrowing, the more likely a mortgage product fee charged rate is to be beneficial to you.

Simple ways to calculate if you should consider a mortgage product fee charged rate

Full calculations on the effectiveness of mortgage product fee charged mortgage rates are complex if calculated to the penny. But it is fairly simple in many cases, to take a quick view to see if you should be considering rates with fees.

Example

£100,000 of borrowing

Rates available over two years

4.50% with no mortgage product fee

4.25% with £995 mortgage product fee

The potential saving here is 0.25% on £100,000 over two years

If you simply use your calculator as follows

£100,000 X 0.25 % X 2 = £500

(this gives you the value of a 0.25% saving on £100,000 over two years)

Clearly, there is no value in the rate with the lender’s mortgage product fee in this case as the saving is around £500 against the fee cost of £995.

Example two

£300,000 of borrowing

Rates available over two years

4.50% with no mortgage product fee

4.25% with £995 mortgage product fee

The potential saving here is 0.25% on £300,000 over two years

If you simply use your calculator as follows

£300,000 X 0.25 % X 2 = £1,500

(this gives you the value of a 0.25% saving on £300,000 over two years)

In this case a potential interest saving of £1,500 against the mortgage product fee cost of £995 is worth considering.

Can I not simply work out the difference between monthly payments?

Looking at the difference in monthly payments is the most common method we see borrowers use to establish if a fee paid product is for them. For most residential borrowers it simply does not work. Let’s look at this with an example.

A mortgage is a long-term loan on which interest is charged. Typically in the UK loans are set up over 20 to 30 years (although they can be shorter or longer)

If a borrower requests a mortgage of £150,000 over 25 years, the lender has to work out a monthly cost including the monthly payment of interest on the borrowing.

On a 4.5% interest rate this will be in the order of £834 per month.

If a 4.0% interest rate were available monthly payments would total £792 per month

The difference in monthly payments is £42, over a mortgage product term of two years, the calculation would be:

£42 x 24 = £1,008

If the mortgage product fee charged is £995, there appears to be no saving on the lower interest rate.

Why is this not the full story?

The difference in monthly payments between the two products is the difference in interest charged.

A 0.5% saving on the interest rate on a £150,000 mortgage is worth around £750 a year, over two years that totals £1,500.

In this example the lower interest rate product with the lender’s mortgage product fee is actually worth considering.

If you are interested to find out why so little capital was repaid against such a large interest bill we explain this below

Why is so little of my monthly mortgage payment going to pay off capital?

When the lender agrees a mortgage arrangement, a calculation for the monthly payment has to be made. Early in the mortgage term where the mortgage balance is higher, the interest cost is also higher.

In our example earlier on this page, an interest rate of 4.00% on lending of £150,000 is £500 a month.

If our borrower were to pay off a £150,000 mortgage without interest, evenly over 25 years, this would work out at £500 capital repaid a month.

If we add interest at 4.00%, in the first year our borrower will be paying £500 capital and £500 interest monthly, total monthly repayments £1,000.

Instead of this, the Lender looks for less capital back monthly in the early years when interest costs are higher, and sets a more manageable monthly payment of £792 per month over the 25 year mortgage term.

Later in the 25 year mortgage term, the interest cost is much lower and the bulk of the monthly £792 paid is repaying capital.

Considering this, you can see that the more you pay off of your mortgage early, the more interest you will save overall.

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]]> Save money by getting off of a Standard Variable Rate mortgage https://amortgagenow.co.uk/blog/standard-variable-rate/ Tue, 14 Feb 2023 09:23:00 +0000 http://amortgagenow.co.uk/?p=8836 What is Standard Variable Rate? Standard Variable Rate, sometimes called a ‘revert rate’ or ‘reversion rate’, is the interest rate that your mortgage lender moves your mortgage to when your introductory offer ends. For example, a borrower who took a two-year fixed rate will see their mortgage revert to the standard rate at the end ... Read more

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What is Standard Variable Rate?

Standard Variable Rate, sometimes called a ‘revert rate’ or ‘reversion rate’, is the interest rate that your mortgage lender moves your mortgage to when your introductory offer ends. For example, a borrower who took a two-year fixed rate will see their mortgage revert to the standard rate at the end of the product period if they do not take alternate action. The lender will keep the borrower on this rate unless action is taken.

Why is being on a Standard Variable Rate a problem?

In short, cost.

Mortgage lenders like borrowers to be on this rate as it is very profitable for them because they are in control of the rate.

Our analysis of 63 lenders in today’s market shows that a borrower with a mortgage of just £100,000 could save around £200 per month simply by switching from their lender’s standard variable rate to a more competitive mortgage rate.

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Save an average of £187 per month against the Standard Variable Rate on your Residential Mortgage

Our table shows Lenders’ current standard variable rates and the potential monthly savings available when swapping rates for a borrower with a £100,000 mortgage.

LenderStandard Variable RateSaving
Accord6.99%£166
Aldermore Bank8.48%£290
Bank of Ireland7.09%£174
Barclays7.49%£208
Bluestone7.74%£228
Buckinghamshire BS7.74%£228
Cambridge BS6.79%£149
Chorley BS7.49%£208
Clydesdale Bank7.74%£228
Coventry BS6.34%£112
Darlington6.74%£145
Dudley BS7.29%£191
Family BS6.54%£128
Furness BS7.49%£208
Halifax7.49%£208
Hinckley & Rugby BS8.69%£308
Hodge7.10%£175
HSBC6.79%£149
Kensington Mortgages7.75%£229
Kent Reliance7.49%£208
Leeds BS6.99%£166
Leek United6.94%£162
Mansfield7.49%£208
Melton Mowbray7.24%£187
Metro Bank7.00%£167
Monmouthshire BS6.99%£166
Nat West6.74%£145
Nationwide BS7.49%£208
Newbury BS6.00%£83
Nottingham BS6.50%£125
Penrith BS6.25%£104
Pepper Money7.95%£246
Platform6.87%£156
Precise Mortgages7.75%£229
Principality6.45%£121
Santander7.25%£188
Scottish Widows Bank7.49%£208
Skipton BS6.29%£108
Suffolk BS7.44%£203
The Mortgage Lender8.00%£250
Tipton7.29%£191
TSB7.49%£208
Vida Homeloans8.19%£266

The above figures are intended as a guide only and are based on the current SVR against a new rate of 5.00%. Speak to our team for tailored figures for your own situation.

Call us now on 020 8979 9684

Save an average of £220 per month against the Standard Variable Rate on your Residential Mortgage

Our table shows Lenders’ current standard variable rates for buy-to-let mortgages and the potential monthly savings available when swapping rate for a landlord with a £100,000 mortgage

LenderStandard variable RateSaving
Accord6.99%£166
Aldermore Bank8.48%£290
Bank of Ireland7.09%£174
Barclays8.49%£291
Bluestone8.74%£312
BM Solutions8.34%£278
Cambridge BS7.79%£233
Chorley BS7.49 %£208
Clydesdale Bank 8.24%£270
Family BS7.29%£191
Fleet7.00%£167
Foundation Home Loans8.99%£333
Furness BS7.49%£208
Gatehouse Bank7.75%£229
Godiva Mortgages6.34%£112
Hampshire Trust9.00%£333
HSBC6.35%£113
Kensington Mortgages7.75%£229
Kent Reliance9.58%£382
Keystone8.99%£333
Leeds BS7.29%£191
Leek United6.94%£162
Mansfield7.49%£208
Melton Mowbray7.24%£187
Metro Bank7.50%£208
Monmouthshire BS6.99%£166
Nat West6.74%£145
Newbury BS6.00%£83
Paragon Mortgages7.10%£175
Platform6.87%£156
Precise Mortgages7.75%£229
Principality6.45%£121
Saffron BS7.49%£208
Santander7.25%£188
Skipton BS6.29%£108
Suffolk BS7.44%£203
The Mortgage Lender8.96%£330
The Mortgage Works8.49%£291
TSB8.34%£278
Vida Homeloans8.39%£283
Virgin Money7.94%£245
West One8.99%£333
Zephyr8.90%£325

The above figures are intended as a guide only and are based on the current SVR against a new rate of 5.00%. Speak to our team for tailored figures for your own situation.

Does my lender offer alternative rates?

Your mortgage lender in most cases will contact you before your current special rate ends to offer you alternatives to the standard variable rate. However, since they will only be offering you from their limited range of rates you cannot be sure that you can get the best deal available on the market from your existing lender. It is recommended, therefore, that you consider the whole of the market when reviewing your mortgage.

What if I don’t take up the offer of a new rate from our existing lender?

If you do not arrange a new rate with your existing lender you will drop onto the standard variable rate. We are all busy people, and often, even with the best intentions, we may forget to make the necessary arrangements to keep our mortgage rate competitive.

Your mortgage lender will generally contact you when your current rate ends to offer alternatives, but the lender is unlikely to contact you again once you have gone on the standard variable rate.

This does not mean that you have missed your chance to move to a more favourable rate as there are no early repayment charges on standard variable rates, this means you can move your mortgage and save money at any time.

Am I on a Standard Variable Rate?

Many borrowers are on standard variable rates. Mortgage industry figures show that every month there is up to £14 Billion of mortgage lending that is coming out of fixed or tracker rates for mortgage borrowers across the country.

If you have been with your mortgage lender for a number of years and do not remember taking any action to move to a new rate you are probably on a standard variable rate.

What are the costs involved in switching mortgage rates?

You can switch to a new rate from a standard variable rate at no cost in a number of ways. Your existing lender may offer a range of rates you can switch to without cost. Other lenders will be keen for your business and will offer ‘fees free’ remortgaging with rates more favourable than your lender can offer in some cases.

Can I raise extra money?

Yes, when you remortgage onto a new rate with a new lender can raise extra cash to pay off debt, build an extension or improve your home, or put money aside for business reasons, school fees, etc. Your existing lender may also offer you extra cash through what is known as a further advance.

Are there disadvantages to moving from Standard Variable Rate?

There could be for some borrowers.

For example, as standard variable rates do not carry early redemption charges, leaving your mortgage on an SVR could be more suitable if you are expecting to repay the mortgage in full in the short term. This also applies if you intend to pay lump sums off of your mortgage or overpay your mortgage.

You should always speak to a qualified mortgage advisor before you take a new mortgage rate.

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