Best mortgage rates – November 2020
This month brings another lockdown in England and continued restrictions across the rest of the UK. What impact will this have on you and your mortgage? See what the experts are saying, compare rates and find the best deal for you.
Finding the best mortgage rate in a sea of mortgage deals is hard work. So every month we’ll be showcasing the best deals for you, with input from the mortgage experts at L&C.
Finding the best mortgage rate is critical as it will determine how much you can afford to borrow and how much your monthly repayments are.
What’s happening with mortgages this November
Business as usual
Despite a lockdown in England and continuing restrictions in other parts of the UK this month, the housing market remains open.
This means that physical mortgage valuations can continue, which in turn means mortgage applications can progress as normal.
David Hollingworth from L&C Mortgages said, “Valuers will now be well used to working in a Covid secure manner and so should hopefully avoid the backlog that we saw in April.”
‘That’s important as we head toward the end of the year with continued strong demand for mortgages and home moves.”
90% and 95% mortgages
On the availability of 90% and 95% mortgages, Hollingworth said, “We should expect to see very few new launches at this higher loan to value end of the scale and there are eligibility and availability limits placed on those mortgage deals that do feed through.”
“However, Accord have already launched some 90% rates in November which brought a slight change in approach with a 3 day (not the typical 2 days) initial availability period and extending the deal to homemovers as well as first time buyers. That launch was quickly followed with the welcome news that the products would remain available for more than the initial 3 days.”
We can expect to see more of these “flash sales” or time limited deals, in some cases making a product only available for 24 or 48 hours.
For consumers, this sort of time limited release means using a mortgage broker, who knows when time limited offers are coming to market, is more important than ever.
The furlough scheme extended
The furlough scheme will now run until March 2021, subject to a review in January.
If you are about to apply for a mortgage or are part way through, lenders will require a letter from your employer confirming when you are due to return to work and confirmation of whether your salary will be reduced before considering applications. This is likely to add some delay to applications.
Several banks will not take account of any extra income such as overtime, commission and bonuses when deciding affordability.
And some banks will not offer mortgages to people on furlough.
Mortgage holidays extended
It was announced on 31st October that mortgage borrowers who’ve not yet had a mortgage payment holiday will be able to request one at any time in the next 6 months.
If you are already on a payment holiday you could extend it for up to six months.
New and extended mortgage holidays will not show up on your credit report. But be aware that even if it’s not on your credit report, lenders may be able to deduce it from an absence of mortgage payments and use this information when deciding on any future borrowing.
For more details see our guide on mortgage holidays
Remortgaging in November 2020
Mortgage rates are still low which is good news for remortgage borrowers looking to get a better deal in place.
If you are approaching the end of your current mortgage deal, you can still take advantage of some very attractive rates, irrespective of Loan to Value.
Fixed or Variable rate mortgage?
Some may like the idea of a tracker mortgage to benefit from any future interest rate cut over the lifetime of the mortgage, but it’s important that borrowers understand the terms of any variable deal. Some trackers apply a minimum rate, often referred to as a collar or floor. A discounted rate is pegged to the lender SVR so there’s no guarantee the lender will move in line with base rate in any case.
Fixed rate 2 and 5 year mortgages continue to be competitive.
And there are even 10 year fixed rates at just under 2%.
Borrowers will need to think carefully before jumping in. Early repayment charges on long term deals usually persist throughout the fixed rate period. And while you can port the mortgage if you wish to move, flexibility will be limited.
For example, if top up borrowing is required there is no guarantee that the lender would be able to offer it. That could mean you have to look elsewhere, which would incur an early repayment charge that could amount to thousands of pounds.
Help finding the best mortgage rates
Whether you’re looking for a first mortgage, a buy to let mortgage or want to see if you can get a better deal by remortgaging, use the charts below to browse mortgage rates online.
Browse mortgage rates
Take a look at today’s best rates from lenders and get an overview of mortgage options now.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage.
Representative example A mortgage of £204,302 payable over 23 years, initially on a fixed rate until 31/12/24 at 1.56% and then on a variable rate of 5.05% for the remaining 18 years would require 62 payments of £881.42 and 214 payments of £1,168.08. The total amount payable would be £305,690 made up of the loan amount plus interest (£100,315) and fees (£1,073). The overall cost for comparison is 3.6% APRC representative.
What are mortgage rates?
Mortgage rates are the rate of interest charged by a mortgage lender (bank or building society). The interest is charged by the lender as compensation for the money they have lent them in order to purchase a property.
Interest rates are determined by the lender in most cases, and can be either fixed (ie remain the same for the term of the mortgage) or variable (where they fluctuate with a benchmark interest rate). Before you compare mortgages, you need to understand the different types. For more information see what type of mortgage should I get?
Help finding the best mortgage deal
The best mortgage deal isn’t just about interest rates. You need to consider whether the mortgage term is right for you, arrangement fees and more.
To get a better idea of the best mortgage for you, use our online mortgage service provided by the fee-free mortgage broker L&C.
L&C can compare the latest mortgage deals for you over the phone, or you can do it yourself in real-time online. Whichever you choose they can help search the market to find you the best mortgage deal, see if you qualify and even help you apply online, doing all the legwork to get you your mortgage offer.
Handy tools and calculators
Here’s a selection of practical gadgets and tools to help keep things simple.
How much can I borrow?
A quick check to find out what size mortgage you can get on your income.How much can I borrow?
How much will my mortgage cost?
Find out how much your payments would be each month.Mortgage monthly cost
Stamp duty calculator
Find out how much you will need to pay in stamp duty.Stamp duty calculator