Cheap Mortgage

There's more to a cheap mortgage than a low interest rate

When you're looking for a cheap mortgage, interest rates are a handy indicator – but they don't tell the full story. The APR (Annual Percentage Rate) is more accurate, because it includes the actual cost of credit such as arrangement fees and so on.

Everybody wants a cheap mortgage, and most people base their decision on the interest rate quoted by the lender. On the face of it that makes sense – the lower the interest rate, the less money you'll pay – but it can be deceptive if you don't look at the Annual Percentage Rate, or APR.

A non-APR interest rate only tells you the interest you'll pay, and because different lenders have different fees you might find that your cheap mortgage isn't as cheap as you think. For example, different lenders charge different arrangement fees, which can be less than £300 or more than £1,500, and then there are other costs such as sealing fees and so on. As a result, the APR is the best way to look for a cheap mortgage: it tells you the full story.