How to get the best mortgage deal

Getting the best mortgage deal isn’t just about finding the lowest rate. The true cost of a mortgage deal includes a mix of your interest rate, product fees and incentives like cashbacks. Once you understand how these work together, it’s much easier to compare deals and get a clearer idea of what might be the best option for you.  

We spoke to our mortgage experts, Matt Smith and James Outhwaite to get their tips on finding the best mortgage deal in 2026. 

What makes up a mortgage deal? 

Every mortgage deal comes down to four key parts: 

• The interest rate  

• The product fee 

• The length of the deal (a.k.a. product term) 

• Other product features (including the option for overpayments and early payment charges) 

This equation is also directly influenced by the size of your mortgage loan and the mortgage term itself. 

Looking at these factors together, rather than the rate alone, is the best way to find the right deal for your situation. 

The interest rate

The interest rate is the headline number most people notice first when researching mortgages. It shows how much interest you’ll pay on your loan, impacting both the total cost of the mortgage and your monthly payments.  

The impact of interest rates on your total mortgage cost will depend on whether you choose a: 

• fixed rate mortgage – where your rate stays the same for a set period, such as 2, 3 or 5 years; 

• tracker or discounted mortgage – where your rate can go up or down, usually in line with wider interest rates and economic factors.

Whilst a lower interest rate can look attractive, James recommends comparing it alongside additional product fees and the overall cost over the term. 

A lower rate does not always mean a cheaper mortgage. For example, a 2-year fixed deal at 3.99% with a £1,999 fee could cost more overall than a 4.19% deal with no fee, as there is less time for the lower rate to offset the upfront charge.

The opposite can be true over longer fixed terms. A 5-year deal at 3.99% with a £1,999 fee may work out cheaper overall than a 4.19% no-fee alternative, as the interest savings are spread over a longer period. Comparing the total cost of each deal, including fees, can help you identify the best value option.

Current average and lowest mortgage interest rates

Term	Avg rate	Weekly change	Yearly change	Lowest rate	Weekly change	Yearly change
2-year fixed	5.06%	-0.02%	+0.58%	4.34%	-0.05%	+0.61%
5-year fixed	5.09%	-0.02%	+0.60%	4.48%	+0.00%	+0.63%

Updated: August 25, 2026

^{* These rates are provided by Podium and are an average based on 21 lenders’ rates, which equates to 95% of the mortgage market. We exclude some specialist lenders that may offer higher rates, such as to borrowers with poor credit histories. This is to ensure our average figures represent the majority of mortgage options.} 

Take a look at the current average mortgage rates and average remortgage rates for this month.

Product fees (arrangement fees) 

Most mortgage deals include a product fee from the lender (sometimes called an arrangement fee or booking fee). 

These fees can be a flat fee, or a percentage of your loan (usually 1-3%).  

How much are typical mortgage product fees?  

Not all mortgage deals include product fees. Out of those that do, it’s reasonable to expect product fees of between £900 – £2,000. Product fees are a way of paying some of the lender’s costs upfront, and will usually come with a lower interest rate, compared with a similar product without a fee.   

These fees can often be added to your mortgage, but bear in mind that you’ll pay interest on it as well.  

A deal with a lower rate but a high fee can end up costing more overall – especially if your loan-to-value is smaller.  

Sometimes, the savings that you make with a lower rate can still make this worthwhile, even when adding the fee to the mortgage balance. 

Matt explains “It is important to look at the fee as part of the overall cost package to help determine which option is best for you.” 

The mortgage term 

The mortgage term is how long you take to repay the loan. According to UK Finance Data, this used to be 25 years, but terms over 30 years are becoming more common with first-time buyers, as borrowing over longer term can sometimes increase the amount that you can borrow. 

A longer mortgage term also reduces your monthly payments, but a key thing to remember is that it increases the total interest you’ll pay over time. 

Matt recommends weighing up the impact of the mortgage term on the total cost:  

When choosing a mortgage, you should consider your different mortgage term options, as well as the choices of fixed-rate deals.

The length of your mortgage term can also influence whether a fee or no fee product is the cheapest option for you.

MORTGAGE GUIDES

Should I get a 2 or 5-year fixed rated mortgage?

Choosing the best mortgage deal: short-term vs long-term 

When comparing mortgages, it helps to balance what works best for you now, with what will end up better in the long-term. 

James recommends using a simple equation for calculating the total cost:  

“Many people naturally think about keeping their monthly costs as low as possible, but it’s worth considering the total money you will pay back to your lender over time.”

To compare mortgage deals with the same lengths of term, calculate the total cost over the deal period: 

(monthly payment × number of months) + product fee

If you are comparing product deals across different lengths of term, James recommends comparing the effective annual cost: 

(monthly payment x number of months) + product fee / number of years

Whilst this helps to work out the costs upfront, another aspect to consider is how you maximise how much of your payments go directly to the loan: 

By choosing the lowest combination of fees and interest payments, it can maximise the amount you repay to your loan each month, meaning that you will have the lower balance at the end of your deal. This is often more difficult to calculate, but there are an increasing number of tools available online that help you identify this.

Try our Mortgage Calculator

See how much you could afford to borrow

How to find the best mortgage deal for the short-term 

Lower monthly payments can be appealing if you want to make buying more affordable and comfortable now. This can be especially helpful if you’re getting on the property ladder or borrowing at the top end of your budget. 

Choosing a mortgage with a lower interest rate can help keep your monthly payments lower. A longer mortgage term can also help reduce your monthly payments, but you are likely to end up paying more interest, making the total cost of your mortgage much higher. 

Not all deals work the same way; Matt explains how the economic climate can have an impact on what offers are out there and what might be better suited to you:

“Traditionally shorter mortgage deals are cheaper, but then there is a trade-off with certainty and security in the current climate.” 

How to find the best mortgage deal for the long-term 

Focusing only on lower monthly mortgage payments can often mean you pay more interest over a longer period of time.  

If you want to reduce the long-term cost of homeownership, you may want to consider mortgage deals with a shorter mortgage term.  

James recommends considering the mortgage term when choosing a mortgage. 

“A key variable you can adjust is your mortgage term, so how long it takes to pay it back. A shorter term means higher monthly payments, but you’ll pay less interest overall. A longer term lowers your monthly payments, but you’ll pay more in interest over time.”

This option suits those who have a stable income and can save money each month, even with their existing monthly payments.  

If you are remortgaging, you may be better off considering a higher monthly payment and switching to a shorter mortgage term. 

Some homeowners can take a more flexible approach by: 

1. Choosing a more manageable, cheaper deal now to keep monthly payments lower  

2. Checking if you have the option of overpaying without additional fees 

3. Overpaying each month, if your budget allows 

4. Reduce or stop those extra payments if you need the money elsewhere 

5. Switching to a shorter term and higher monthly payment later 

“Choosing a cheaper monthly payment upfront, doesn’t necessarily mean that you can’t overpay your mortgage, especially if your financial circumstances improve.

Some lenders could allow you to overpay up to 10% without fees, which gives you flexibility and helps you pay it off faster. This can vary, so it’s always worth checking your mortgage terms first before considering overpaying.”

How to work out what’s right for you 

Getting the best mortgage deal depends on what your goals are, whether it’s keeping the monthly costs more manageable, or paying less for your mortgage overall. To decide what your priorities are: 

• Think about what you can comfortably afford each month 

• Consider your future plans (like how soon you’ll be moving house, or likelihood of changing jobs) 

• Check whether your mortgage allows overpayments without charges 

• If you have any doubts, you should speak to a mortgage broker to understand your options for both short-term and long 

Before entering a mortgage, take time to work out what you can afford or look at your options using our mortgage calculators.  

How to find the best mortgage deal: a step-by-step guide 

Step 1: Know your numbers before you search

Before comparing deals, get a clear picture of your finances, including: 

• Your loan-to-value (LTV) – a lower LTV usually means better rates, so the larger your deposit, the better your rates will be 

• Your credit score – get a free credit check, or get a mortgage in principle to see what you could borrow 

• What you can afford each month – look at your current income and outgoings, to see what range of monthly payments you could afford to make 

If you’re remortgaging soon, you can track your equity with our Equity Tracker (available through our instant valuation tool) – find out whether it’s enough to move to a lower LTV band. 

Step 2: Compare the true cost, not just the rate

Don’t focus on the headline rate alone. Instead, compare the full cost of your mortgage over the full term: 

(monthly payment x number of months) + product fee / number of years on your term 

For example: 

• Deal A: lower rate of 4.5%, £999 fee 

• Deal B: higher rate of 4.9%, no fee 

Depending on your loan size, either could be cheaper overall. Also, keep an eye out for what it means for your balance at the end of your deal too. 

Step 3: Decide on fixed vs variable

Fixed rates suit people who want certainty in their monthly payments, to manage their expenses. Variable rates may suit those who are comfortable with changes in payments, particularly if they’d rather not lock in for a longer period. 

Step 4: Choose the right deal length

Think about how long you plan to stay in your home when choosing. Rates could vary for each option, depending on the market, so look at the total cost for each.  

• Shorter deals (2-year) = more flexibility, but mean remortgaging sooner (and more fees) 

• Longer deals (5-year+) = offer stability over a longer period 

James’ tip: “Check for early repayment charges (ERCs), in case you want the option of paying it off early, or whether your mortgage is portable if you move home.” 

Step 5: Consider using a mortgage broker 

Using a mortgage broker can help you to: 

• access more deals across the market at competitive rates 

• match with lenders and products suited to your unique situation 

• save time on comparing options 

Note that some brokers are free to use but some may also charge a fee.  

Step 6: Start the process early

Depending on the lender, mortgage offers typically last 3-6 months*, so you can start researching your options early on. Securing a deal in advance can help if rates are rising, because you still have the option to move to a better rate if they drop before confirmation. 

Common mistakes to avoid when choosing a mortgage deal

• Focusing only on the lowest interest rate 

• Overlooking product fees 

• Not considering the mortgage term 

• Ignoring early repayment charges 

• Accepting your lender’s renewal offer without comparing (when remortgaging) 

• Extending your term without reviewing the long-term cost 

Mortgages can be confusing, particularly when weighing up different interest rates, terms and costs between lenders. To find the best mortgage deal for you, make sure you consider the short-term gains of lower interest rates against the total cost of the mortgage over time, and compare multiple options. 

FAQs

• What makes a good mortgage deal?

  A good mortgage deal balances the interest rate, fees and term to suit your budget and plans. 

• What is a mortgage product fee?

  A product fee (or arrangement fee) is a charge from the lender to access a mortgage deal. It is based on a percentage of your total loan or charged at a flat fee.  These fees cover the costs that the lenders undertake to run affordability checks and set up the new product terms. 

• Is it worth paying a fee for a lower rate?

  It is sometimes worth paying a product fee for a lower mortgage rate over time. Larger loans are more likely to benefit from a lower rate with a fee, while smaller loans may be better with no fee. Calculate the costs over time, to see what would work out better for your situation. 

• Is a mortgage with lower monthly payments always better?

  Not always. Lower monthly payments often mean a longer term, which increases the total interest you’ll pay. 

• Should I get a 2-year or 5-year fixed mortgage?

  Choosing between a 2-year or 5-year fix depends on your plans and whether you think mortgage rates are likely to change in your favour. A 5-year fix offers more certainty, while a 2-year fix gives more flexibility.

*Sources: FCA’s 2024 Product Data on first-time buyer mortgage terms; UK Finance Data 2025; FCA: Support available for mortgages as interest rates rise 

Please note: Your home may be repossessed if you do not keep up repayments on the mortgage. Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.