Best mortgages to start 2014

Updated: 

Coin stacks arranged to form a house shape. Concept image about rising house prices and mortgage costs. Copy space on the left s

If you're in the market for a mortgage, either because you're buying a property or remortgaging, the good news is interest rates are low at the moment.

That's mostly thanks to the Funding for Lending scheme, which made cheap credit available to banks and building societies on the proviso they lent the money out to borrowers.


But those particular taps are being slowly turned off, so it might pay to act sooner rather than later to secure a low-rate mortgage.

Let's take a look at the top mortgages out there right now, based on a combination of both initial interest rates as well as the important fees and charges.

The examples below are for a mortgage of £200,000 taken out on a 25-year repayment basis. I've looked at various different maximum loans to value, which is the percentage of the home's value you want to borrow.

Fixed rate mortgages
In lots of cases, fixed rate mortgages are now cheaper than lenders' standard variable rates (the rate you move on to at the end of your initial fixed rate or tracker period). Here are the cheapest two-year mortgages now.

Maximum loan to value

Lender

Initial interest rate (APR)

Lender fees

60-65%

Norwich & Peterborough Building Society

1.99%

£295

70%

HSBC

1.99%

£999

75%

First Direct

2.29%

£499

80%

West Brom Building Society

2.39%

£299

85%

Clydesdale Bank

2.69%

£0

90%

Skipton Building Society

3.99%

£0

95%

HSBC (Help to Buy)

4.79%

£99



And here are the top five-year rates.

Maximum loan to value

Lender

Initial interest rate (APR)

Lender fees

65%

Norwich & Peterborough Building Society

2.84%

£295

75%

Yorkshire Building Society

2.84%

£975

80%

Abbey for Intermediaries

3.69%

£0

85%

First Direct

3.69%

£0

90%

Darlington Building Society

4.39%

£574

95%

HSBC (Help to Buy)

4.99%

£99


Check the latest mortgage rates

Offset mortgages
If you have plenty of savings and so want to use them as part of an offset mortgage (which can be a good idea given how low savings rates are right now) here are the top two-year fixed rate offset deal.

Maximum loan to value

Lender

Initial interest rate (APR)

Lender fees

65%

Chelsea Building Society

2.04%

£875

75%

Accord Mortgages

2.39%

£475

80%

Accord Mortgages

2.44%

£975

85%

Coventry Building Society

2.99%

£999

90%

Scottish Widows

4.69%

£1,499

95%

Norwich & Peterborough Building Society

4.89%

£845


These are the top five-year fixed rate offset mortgages.

Maximum loan to value

Lender

Initial interest rate (APR)

Lender fees

60-75%

Accord Mortgages

3.09%

£475

80-85%

Coventry Building Society

3.95%

£999


Variable rates
Taking out a variable rate mortgage is always something of a gamble, although you would have been quids in had you speculated five years ago when the Bank of England cut the Base Rate to a record-low 0.5%.

Opinion is divided on just when interest rates might start to rise, but the general consensus seems to be it won't be this year.

Maximum loan to value

Lender

Initial interest rate (APR)

Lender fees

60%

HSBC

1.99%

£99

65%

Coventry Building Society

2.09%

£999

75%

Santander

2.49%

£495

80%

HSBC

2.79%

£499

85%

Coventry Building Society

2.85%

£0

90%

First Direct

4.19%

£0


See how much a mortgage could cost you and get help from an expert mortgage adviser

This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker, before acting on anything contained in this article.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.


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