Best mortgage rates – July 2021


Just when we think mortgage rates can't get any lower, they do!

Finding the best mortgage rate in a sea of mortgage deals is hard work. So every month we’ll be showcasing the mortgage best deals of 2021 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.

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What’s happening with mortgages July 2021 

Record low rates

Rate wars continue this month as HSBC and TSB have both unveiled mortgage rates below 1%. These 2 year fixed rate deals come with an interest rate of just 0.94%.

While the stamp duty holiday is being phased out, buoyant activity in the housing market is expected to continue. That’s because homebuyers can still benefit from reduced stamp duty rates until October when they will finally revert to normal. As a result lenders are competing for your business by offering very low rates.

And everyone can benefit. According to David Hollingworth at our mortgage broker partners L&C, ‘The competitive pressure is feeding through into all areas of the market, including for borrowers with small deposits and those who want to fix for five years or more. For years we’ve been thinking mortgage rates cannot go any lower and then they do.’

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More mortgage products available – including for those with 5% deposit

The number of mortgage products continues to rise according to Moneyfacts. As of the start of this month there were over 4,500 mortgages available. By comparison, in June 2020, there were only 2,810 mortgages on the market.

Even borrowers with just a 5% deposit are benefiting from historically low rates. The government’s new mortgage guarantee scheme has resulted in dozens of new low-deposit deals being launched.

David Hollingworth from L&C noted that, “A few months ago there were no deals for borrowers with small deposits. But today, Coventry Building Society is offering a two-year fixed rate of 3.25 per cent with a £999 fee for those with a five per cent deposit. Leeds is offering a two-year fixed rate of 2.47 per cent with a £999 fee for borrowers with a ten per cent deposit.”

Is now the right time to fix your mortgage?

Now could be a great time to lock in a fixed-rate mortgage, according to experts. Platform and NatWest have launched fixed-rate deals with the lowest ever interest rates seen on a two-year and five-year fix respectively, according to brokers, MoneySavingExpert has reported. Even if you factor in the product fees (Platform is £1,499 with £250 cashback; Natwest is £995),  the rates of 0.95% and 1.17% respectively show how fierce competition is between lenders.

And there could be other reasons to fix now, apart from getting a great deal. Some economists have expressed concern that an increase in consumer spending due to the easing of restrictions could cause inflation to rise quickly. If this continues, the Bank of England could be put under pressure to increase interest rates.

When it comes to remortgaging it’s always important to consider the full picture, including all the costs involved, such as arrangement fees. It’s a good idea to speak to a broker who can talk you through the process and the costs involved. They’ll help you find the best deal for you.

Use our online mortgage finder, or speak to our mortgage advisors to start getting the best deal today

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. Scroll down for mortgage best buys from L&C, calculators & more…

Browse mortgage rates

Take a look at today’s best rates from lenders and get an overview of mortgage options now.

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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.