Mortgage Interest Rate Comparison

Mortgage repayments are calculated using a standard annuity formula where the monthly payment equals the loan principal multiplied by [r(1+r)^n] / [(1+r)^n - 1], with r being the monthly interest rate and n the total number of payments. Even small rate differences produce significant cost variations over a 25 or 30-year term, because interest compounds monthly on the gradually reducing balance.

The calculator shows the monthly payment and total interest for your balance and term at nine rates from 3% to 7% in half-point steps, so you can read off what any quoted rate would cost. A 0.5% rate difference on a £250,000 mortgage over 25 years changes the monthly payment by about £74-£77 at today's rates of 5% to 6%, and total interest by about £22,000-£23,000. That is the sort of gap that decides between a fixed-rate, tracker or variable product, rather than anything printed on the product sheet.

UK mortgages commonly offer an initial fixed or discounted period, typically 2 or 5 years, before reverting to the lender's Standard Variable Rate (SVR). Each row assumes one rate for the whole term, so to see what reverting would cost, read the SVR row as well as the deal rate. Early Repayment Charges during the initial period are not included, and they matter when the question is whether remortgaging at a new rate saves money once fees are counted, so add them to the comparison yourself.

Rates rose again in 2026 even though Bank Rate held at 3.75%, because the swap rates lenders price fixes from climbed above 4.7%. Moneyfacts put the average two-year fix at 5.73% and the five-year at 5.78% on 15 September 2026, up from 4.84% and 4.96% in March, with the best deals for large deposits below those averages. Trackers are priced off Bank Rate plus a margin, buy-to-let and specialist lending for poor credit or complex income cost more, and the average SVR you land on if a fix expires without a remortgage was 7.13%. Keenest pricing needs a 25-40% deposit, good credit and clear income.

Loan-to-value, the loan divided by the property value, sets the tier of pricing you can reach. The best rates sit at 60% LTV, where the lender carries the least risk. At 75% the rate rises by 0.1-0.3%, at 90% by 0.5-1.0%, and at 95%, the ceiling for most first-time buyers, by 1.0-1.5% against the 60% price. A gap of about 0.9 points between a 60% and a 90% LTV deal, say 5.2% against 6.1%, is worth about £108 a month on a £200k mortgage over 25 years, or £1,300 a year. Overpaying enough to cross a band before you remortgage is often the cheapest rate cut available.

Choosing between product types is a judgement about your own tolerance as much as the market. A fix gives payment certainty for 2-10 years and suits borrowers whose mortgage takes a large share of income or who simply need to budget. A tracker follows the Bank of England base rate, 3.75% since December 2025, plus a margin, so base plus 0.5% prices at 4.25% and adjusts as the base rate moves, which rewards anyone who can absorb volatility while rates fall. A variable rate works similarly, except the lender controls the margin. More than 85% of UK borrowers pick a fix, and the five-year version typically costs 0.2-0.4% more than the two-year.

Lenders stress-test affordability at a rate above the one on offer, usually 1-3 percentage points higher or their reversion rate, so a 5.7% product might be assessed at 6.7% to 8.7%. The Bank of England's fixed 3-point test was withdrawn in August 2022, lenders eased their stress rates in 2025 and the FCA does not require one on fixes of five years or more, but on shorter deals the check still bites, and a payment you can plainly afford today can still be refused. Tidying your credit file with Experian or Equifax about 6 months ahead helps, and a score above 900 reaches the best pricing. A broker with whole-of-market access typically finds a rate 0.1-0.3% better than going direct, and several cost nothing to use, including Habito and London & Country, with Trussle and John Charcol also worth a call.