Comparing mortgages: look beyond the interest rate
Interest rate, term, arrangement fees, insurance and flexibility together determine the real cost.
8 min read
A low interest rate matters, but always compare the full annual percentage rate of charge (APRC) and the conditions attached to it.
The term affects both the monthly repayment and the total interest. A longer term gives you breathing space, but usually costs more over the whole period.
Check whether mortgage life insurance and buildings insurance must be taken out with the same lender. The premiums can erode the advantage of a lower rate.
Ask how flexible the mortgage is if you repay early, renovate, let the property or move later on. Those options can be important for business owners and investors.
Compare offers on the same loan amount, the same term and the same deposit. That way you can see which option is genuinely the best value.
