Cheapest Mortgage

With so many mortgages to choose from, how do you find the cheapest?

What kind of mortgage are you looking for? The answer is probably: the cheapest mortgage. Finding a cheap mortgage is easy enough, but finding the cheapest one means a bit of digging. It helps if you've already got money in the bank, too: rates drop dramatically if you can stump up a decent deposit.

When you're looking for the cheapest mortgage available, it's a good idea to think about the type of mortgage you want and how much you want to borrow: different types of mortgages are cheaper than others, and the bigger your deposit the lower the interest rate. If you want the cheapest mortgage, borrowing less than 85% of the property price and choosing a variable rate or tracker mortgage is a good bet. Fixed rate mortgages are more expensive, and if you borrow more than 95% of the property value the rates go into orbit.

Now, find the cheapest mortgage provider. There are three things to consider: the interest rate, the additional costs – setup fees and so on – and any penalties. If you're planning to switch providers in two or three years, the cheapest mortgage might be the one with the lowest penalties for switching.