Home Buyers: A Quick Guide To Understanding the UK Mortgage Market

Welcome to the exciting - and sometimes overwhelming - world of buying a home in the UK.

Whether you're a first-time buyer or moving up the ladder, understanding how mortgages work will seriously boost your confidence.

This guide from The Property Experts breaks down what you really need to know about today’s mortgage market - especially with current interest rates, affordability checks, and government schemes all changing how people buy homes.

Did you know: The Mortgage Experts are part of the 'Experts Group' and are dedicated to modernising the mortgage industry by leveraging technology and a client-first approach to deliver outstanding home financing solutions. The Mortgage Experts save our clients time, hassle, and uncertainty by navigating the mortgage market for them, ensuring they receive the best possible outcome.

8 Things You Need to Know When Speaking to Mortgage Lenders

Let’s take the guesswork out of the mortgage process with these key tips.

1. Mortgage Research Matters More Than Ever

Think of your mortgage like your financial partner for the next two to five (or more) years - you want the right fit.

Main mortgage types:

• Fixed-rate mortgages: Your payments stay the same for a set period (often 2, 3, or 5 years).
• Tracker mortgages: These follow the Bank of England base rate, so they rise or fall accordingly.
• Standard Variable Rate (SVR): This is your lender’s default rate after your initial term ends - usually higher and less predictable.

You can view the current interest rate here, but more buyers are leaning towards short-term fixed deals in the hope that rates will settle or drop in the near future.

2. Understand How Interest Rates Affect You

Interest rates determine how much your monthly mortgage repayments will be.

• Fixed-rate = Stability: Great if you need predictable payments.
• Variable = Flexibility (with risk): Payments go up or down depending on wider economic factors.

The Bank of England base rate has held steady recently, but it’s often been a bumpy ride, so it’s wise to speak with a mortgage broker who can compare the latest deals on the market.

3. What Is Loan-to-Value (LTV) — and Why It Matters

Loan-to-Value (LTV) is the percentage of the property price you’re borrowing. For example, a 90% LTV mortgage means you’re putting down a 10% deposit.

• Lower LTV = Lower Risk for Lenders = Better Rates for You
• Aim for at least a 15% deposit if possible. Buyers with a 25% deposit can secure noticeably better rates and more product choice.

4. Affordability: It's Not Just About What You Earn

Lenders look closely at your income, outgoings, and any existing debt. With cost-of-living pressures and high rental prices, some buyers find borrowing limits tighter than expected.

Top tip: Try to clear any debts before applying and avoid taking out new credit in the months before you get a mortgage agreement in principle.

5. Credit Score = Your Mortgage Passport

Your credit history tells lenders whether you're reliable with money. Missed payments, high credit card balances, or errors on your report can all affect your options.

Check your credit file for free via Experian, Equifax, or TransUnion, and fix any issues before applying.

6. Stamp Duty: Know What You’ll Pay

Stamp Duty kicks in on property purchases above £250,000 (or £425,000 for first-time buyers).

Rates and exemptions change, so use the official HMRC Stamp Duty calculator to get a clear idea of what you’ll owe based on the latest thresholds.

7. Hidden Costs: Budget Beyond the Deposit

The deposit for your new home is just the start. Here are some other costs you’ll need to plan for:

• Mortgage arrangement fee (sometimes added to the loan)
• Valuation and survey fees
• Legal/conveyancing fees
• Land Registry fees
• Moving costs

Add these up early, so you’re not caught out once your offer is accepted.

8. Help for Buyers

The government has scaled back some of its older schemes (like Help to Buy), but support is still available:

• Shared Ownership: Buy a share of your home and pay rent on the rest.
• First Homes Scheme: Aimed at key workers and first-time buyers, offering a discount of up to 30% on selected new builds.

These schemes come with eligibility rules, so speak with a mortgage advisor or broker who knows the ins and outs.

You’ve Got This!

Reading this guide means you’re already ahead of the game. Buying a property is one of life’s biggest milestones, and being mortgage-savvy helps smooth the way.

We Can Help

If you’re getting ready to sell or start your search for a new home our team at The Property Experts & The Mortgage Experts is ready to help.

We know the property market inside-out - and we’ll be here to support you from valuation to moving day.

Call us on 0330 179 8180 or email hello@thepropertyexperts.co.uk to get started.

In the meantime, we’ve answered some of your common questions about the UK mortgage market.

FAQs: Understanding the UK Mortgage Market

What’s better - a fixed or variable mortgage?

It depends on your risk tolerance. Fixed gives security, which is attractive when rates are unpredictable. Variable can save money if rates fall - but it’s a gamble.

How much deposit do I need to get a good mortgage deal?

Ideally 15-25% for the best rates. That said, some 5-10% deals are still available, especially under Shared Ownership or First Homes discounts.

What’s the SVR and when does it apply?

After your initial mortgage deal ends, you move onto the lender’s SVR - usually higher and not ideal long term. Consider remortgaging before this happens.

Can I still buy with a small deposit?

Yes, but you’ll have fewer deals to choose from. Use a mortgage broker, check for local or national schemes, and save what you can - every extra £1,000 helps!