The UK's Top Banks for Mortgages: Find the Best Rates in 2024

We have surveyed dozens of banks and mortgage lenders in the UK to select the top mortgage lenders we'd recommend. Besides the popularity and establishment of the banks we have selected, here are important factors we also considered:

• Interest Rates: One of the primary factors we considered is the interest rates applicable to each bank's mortgage offering. This also depends on other factors like loan-to-value ratio and mortgage term length. We compared different interest rates and selected banks with the fairest rates.

• Product Offerings: The banks we have selected offer dozens of different mortgage products or even hundreds. Whether you want to buy your first home, remortgage, or buy to let, these banks offer plenty of options, so you can choose the one that best meets your needs.

• Unique Features: Beyond the interest rates and types of mortgages offered, we selected banks with special features such as cashback and first-time buyer deals.

• Customer Service: We looked for lenders with excellent ratings and satisfactory reviews from customers irrespective of what offerings they may have. First Direct, for example, consistently ranks among the best online banks in the UK and receives positive reviews for its mortgage services.

• Mortgage Approval Time: A fast and smooth application process can take the stress out of getting a mortgage. Banks generally have reasonably fast approval times, and our picks could see you get approved in a couple of weeks.

Other features we also considered include mortgage eligibility requirements, loan-to-value ratios, and fees.

Since buying a house usually costs a lot of money, most people can't pay for it all at once. So, they get a mortgage to cover the cost.

A mortgage is a kind of loan you receive from a bank or lender in order to buy a home. The bank covers the cost of the property by sending you the money you need to make the purchase while you then begin to pay back the bank in monthly installments. You'll need to pay interest on top of the amount you borrowed, and there may be fees for the service.

When you get a mortgage, the bank or mortgage provider lends you the money you need to buy the house or sends it directly to the property seller. In return, you promise to pay back the loan over a certain period of time, known as the mortgage term.

This can range from 2 years to as high as 30 to 40 years. You make monthly repayments, which include a part of the loan amount plus interest. If you have an interest-only mortgage plan, though, you only need to pay the interest in monthly installments, and then pay back the loan amount at the end of your mortgage term.

There are different types of mortgages and you have to ensure you choose one that not only offers a great deal but is also most ideal for your situation and the type of home you're purchasing. The most important factors to consider when choosing a bank for a mortgage include the following:

Interest rates

The interest is an extra amount that the bank charges you for lending you the money. It's how banks make money from mortgages. It’s usually a percentage of the loan amount, and it can vary depending on different factors like the current economy and your credit history. As you make your monthly mortgage payments, you gradually pay off the loan and build equity in the house until you get to fully own the house once your mortgage payment is complete.

The interest rate is one of the most important features of any mortgage plan. Different lenders will have different rates but this should fall within a certain average range when you compare the offering to that of other lenders. Lower interest rates imply lower monthly repayments and less overall cost over the life of the mortgage.

Some conditions can make a mortgage interest rate increase or decrease significantly. For example, banks tend to charge higher interest rates for higher loan-to-value ratios.

Loan options and programs

Different banks may offer a variety of loan options and programs. They might have different terms, such as fixed-rate or adjustable-rate mortgages, different loan durations, or special programs for first-time homebuyers, low-income individuals, foreigners, veterans, or certain kinds of employees.

Consider your financial situation, your long-term goals, and what unique situation you are in to determine which loan options and programs align best with your needs. For example, some of the banks in this guide have green mortgage schemes that offer favourable terms to buyers of energy-efficient properties.

Banks will also likely support government-backed schemes that could help people afford homes. These could include the following:

• Shared ownership

• First Homes

• Help to Buy: ISA

• Help to Buy: equity loan

• Forces help to buy

• Mortgage Guarantee

• Right to buy

Eligibility requirements

Each bank will have its own set of eligibility requirements for granting a mortgage. These requirements can include factors such as credit score, income level, employment history, debt-to-income ratio, or even having a basic bank account with them before applying for a mortgage.

It is important to understand and evaluate the eligibility criteria of different banks to determine which ones you are likely to qualify for. Usually, can apply for an agreement in principle online. This involves providing your details so the bank can tell you whether you would qualify for a mortgage. There's no commitment to get a mortgage from the bank if they do grant an AiP, and it doesn't hurt your credit score to check.

Customer service

Getting a mortgage is a major life decision and can potentially be stressful. Much of the stress can be removed, however, if you can find a bank that is responsive, helpful, and provides clear communication throughout the mortgage process.

Consider the bank's reputation for customer service by reading reviews or talking to people who have used their services before. The best banks will have multiple options for contacting them, and a support team that is available much of the time and provides quick resolutions.

Reputation and financial stability

This is another important factor to consider. You want to choose a bank that has a solid reputation in the industry and is financially stable. If the bank goes bust, your debt will be bought by another lender, and it is possible that the terms could change.

A reputable bank is more likely to provide reliable and trustworthy services. You can research a bank's reputation by looking at online reviews, ratings, and their history in the industry. Financial stability ensures that the bank will be able to support your mortgage and provide the necessary services throughout its term.

This is the most common type of mortgage now offered by banks and other lenders. In a fixed-rate mortgage, your interest rate will be fixed for a certain amount of time. The fixed rate usually lasts for the first 2 to 5 years, though some banks offer 10-year fixed rate mortgages.

At the end of the fixed-rate period, your interest rate will switch to the lender's standard variable rate, which varies by bank. However, can choose to switch to a new deal with your bank or remortgage to a new lender in search of better interest rates.

Tracker rate mortgages are variable-rate mortgages where the interest rate is directly tied to a specified benchmark, typically the Bank of England base rate. The interest rate on the mortgage "tracks" or follows the changes in the chosen benchmark rate.

You can choose a tracker rate for a certain number of years. During this time, your monthly payments could go up or down as the base rate of interest changes.

Standard variable rate (SVR) mortgages are variable-rate mortgages offered directly by lenders. The interest rate charged on an SVR mortgage is set by the lender and can change at their discretion. This means the amount you pay each month could go up or down.

An SVR mortgage is what you'll usually be moved onto at the end of your fixed-rate or tracker-rate period. This isn't generally the cheapest way to pay off a mortgage, but you may be able to get a better interest rate by switching to a new deal.

Interest-only mortgages require borrowers to pay only the interest on the loan during the mortgage term. At the end of the term, you'll need to repay the loan amount in full. Interest-only mortgages are less common as they're harder to get approval for. They may only be offered on buy-to-let mortgages or to individuals who can prove they have enough income or investments to repay the capital.

When applying for a mortgage, you typically need to provide several supporting documents and information. While specific requirements can vary among lenders, these are the commonly requested documents:

• Proof of ID: This could be a current passport of driver's licence.

• Proof of address: You can use a recent utility, council tax or credit card bill.

• Proof of deposit: This will show you have enough to cover the deposit. It could be a bank statement for you savings account.

• Proof of income: This shows you'll be able to make repayments. Employees can provide payslips and self-employed people can provide their tax return. A letter for HMRC or DWP could also be acceptable.

• Proof of expenses: This shows that mortgage payments will be affordable on top of your other financial commitments. Your bank statements will provide this proof.

• Proof of immigration status: If you're a foreign national, you may also need to provide proof of your right to live in the UK, such as a visa or residency permit.

• Proof of capital: This may apply if you opt for an interest-only mortgage. Your lender may want proof that you'll be able to repay the capital at the end of the mortgage term, such as evidence of owning another property, a bank statement, or an investment account statement.