UK Mortgage Guide 2025
Everything you need to know about UK mortgages - from calculating affordability and understanding rates to overpayments and remortgaging. Find the best deal and save thousands.
Mortgage Quick Facts
2-5 year fixed rates
Up to 5.5x for some
15-20% for best rates
Up to 40 years available
Types of Mortgages
Understanding the different mortgage types helps you choose the right deal for your circumstances. Fixed rates are the most popular in the UK, offering payment certainty.
Fixed Rate
Interest rate locked for 2, 3, 5, or 10 years
Pros
Payment certainty, protection from rate rises
Cons
Early repayment charges, can't benefit from rate falls
Best For
Most borrowers wanting stability
Variable Rate (SVR)
Rate set by lender, can change anytime
Pros
No early repayment charges, can overpay freely
Cons
Payments can increase, usually higher than fixed rates
Best For
Short-term before remortgaging
Tracker
Tracks Bank of England base rate plus a margin
Pros
Benefits from rate cuts, transparent pricing
Cons
Payments increase with base rate rises
Best For
Those expecting rates to fall
Offset Mortgage
Savings offset against mortgage balance
Pros
Reduce interest, keep savings accessible
Cons
Higher rates, complex calculations
Best For
High earners with large savings
How Your Deposit Affects Rates
Your deposit size determines your loan-to-value (LTV) ratio, which significantly impacts the interest rate you'll get. A larger deposit unlocks better rates and saves thousands over the mortgage term.
| Deposit | LTV | Typical Rate | Description |
|---|---|---|---|
| 5% | 95% | ~5.5-6% | Minimum for most lenders, highest rates |
| 10% | 90% | ~5-5.5% | Better rates, more lender choice |
| 15% | 85% | ~4.5-5% | Good rates, Help to Buy available |
| 20% | 80% | ~4-4.5% | Excellent rates, avoid high LTV fees |
| 25%+ | 75% | ~3.5-4% | Best rates and flexible terms |
First-Time Buyer Schemes
The UK government offers several schemes to help first-time buyers get on the property ladder with smaller deposits and better affordability.
Lifetime ISA
Save up to £4,000/year and get a 25% government bonus (£1,000/year max). Must be used for first home purchase or retirement. Property must cost £450,000 or less. Available to ages 18-39.
Shared Ownership
Buy 25-75% of a property and pay rent on the rest. You can "staircase" (buy more shares) over time. Deposit is only needed for your share, making it more affordable. Available through housing associations.
The Power of Overpayments
Overpaying your mortgage is one of the most tax-efficient ways to save money. Even small monthly overpayments can save tens of thousands in interest and clear your mortgage years earlier.
Example: £200,000 Mortgage at 5% over 25 years
| Monthly Overpayment | Interest Saved | Time Saved | New Term |
|---|---|---|---|
| £0 (base) | - | - | 25 years |
| £50/month | £16,420 | 2 years 8 months | 22 years 4 months |
| £100/month | £30,180 | 4 years 10 months | 20 years 2 months |
| £200/month | £52,890 | 8 years 4 months | 16 years 8 months |
| £500/month | £99,870 | 14 years 7 months | 10 years 5 months |
Mortgage Calculators
Mortgage Affordability Calculator
Calculate how much you can borrow
Mortgage Repayment Calculator
Calculate monthly payments and overpayment savings
Stamp Duty Calculator
Calculate Stamp Duty Land Tax
Take-Home Pay Calculator
See if you can afford the monthly payments
Mortgage Guides & Articles
First-Time Buyer Mortgage Guide
Complete guide to getting your first mortgage in 2025
Should You Overpay Your Mortgage?
When overpayments make sense and how much to pay
The Ultimate Remortgaging Guide
When and how to remortgage to save money
Stamp Duty Explained 2025
How much Stamp Duty you'll pay and how to reduce it