Comparing mortgages can be confusing. When you look at mortgage interest rates, you’ll see three different numbers: initial rate, base rate tracker, and annual percentage rate of charge. It’s important that you understand what these different rates mean.
When you take out a mortgage, you’ll usually sign up for an initial deal at a fixed rate or a variable rate, such as a tracker.
These deals can be set length of time, with two-year and five-year deals being the most common.
The interest rate quoted for the initial period only applies during this time.
Base Rate Tracker
Once your initial rate ends, you’ll automatically be moved onto our Base Rate Tracker.
This will be influenced by the Bank of England’s base rate, which is liable to change. This can result in higher monthly repayments. Because of this, you may want to switch to a new deal when the initial deal ends. Read more about this here.
Annual percentage rate of charge (APRC)
The APRC takes into account the initial rate, all mortgage related fees and charges and the SVR.
It then calculates how much the mortgage would cost you each year if the SVR or base tracker rates remained the same until your mortgage is fully repaid, but this is unlikely to happen!
What will my interest rate be?
The initial interest rate will depend on what Loan To Value (LTV) band you are in. Your LTV is the percentage of property value that requires a mortgage. You provide the remaining percentage as your deposit. You can find more information on LTV here.
You can view our initial interest rates here.
Your rate will also depend on whether you choose a product with or without a product fee. You will be able to discuss which option is best for you with one your mortgage advisor as well.
Please note our product fees are refundable if the mortgage does not complete.