With big lenders launching new low-rate mortgage deals, headlines are buzzing about a potential mortgage “rate war.” Rates as low as 3.99% from major banks like Barclays and Santander have certainly grabbed attention, but are these deals as good as they seem?
At Quick Mortgages, we always take an honest, full-picture approach when recommending mortgages to our clients. A low interest rate is great, but it’s not the only thing that matters. Fees, incentives, reversion rates, and total cost over the fixed term all play a role in determining the real best deal.
So, let’s break it down and explain why the headline rate isn’t the only thing to focus on when choosing a mortgage.
Are low-rate mortgages always the best deal?
At first glance, a mortgage with a low rate sounds like a no-brainer. But these deals often come with upfront fees, sometimes as high as £1,999. Depending on your loan size, these fees can make a big difference to the total cost of your mortgage.
For example, let’s compare two different mortgage options over the same fixed period:
- Option A: 3.99% rate with a £1,999 fee
- Option B: 4.25% rate with no fees
If you’re borrowing £100,000, the total cost over the fixed term may actually be lower with Option B, despite the slightly higher rate. Why? Because the upfront fee on Option A adds to the overall cost, meaning you could end up paying more than expected.
This is why, as brokers, we don’t just look at interest rates—we calculate the true cost of borrowing over the fixed period to ensure our clients get the best deal, not just the lowest rate.
Why does mortgage size matter when comparing deals?
The size of your mortgage can have a huge impact on whether a low-rate, high-fee deal is good value.
- For larger mortgages, where the loan amount is high, securing a lower rate (even with a fee) can be beneficial because the lower interest payments outweigh the fee.
- For smaller mortgages, high upfront fees can make a low-rate deal more expensive than a slightly higher-rate mortgage with no fees.
For example, a £1,999 fee on a £500,000 mortgage is a relatively small percentage of the loan, so the lower rate can work out better. But on a £100,000 mortgage, that same fee makes a much bigger impact, meaning a higher rate but no fee could be the better option.
This is exactly why we assess each client’s circumstances individually—what’s best for one borrower may not be best for another.
Why do lenders introduce low-rate mortgage deals?
Whenever a big lender releases a mortgage with a notably low rate, it naturally grabs attention—and for good reason. These deals often make headlines, sparking interest among borrowers eager to secure a better rate.
New, lower rates are always welcome, and we certainly don’t knock that. However, it’s important to look beyond the headlines and consider the full details of the deal. Many of these products come with upfront fees, which in this case can be as high as £1,999. But that’s not the only cost to consider.
At Quick Mortgages, we take into account all costs associated with a mortgage, including:
✅ Upfront lender fees – arrangement fees, booking fees, and product fees
✅ Valuation costs – some lenders offer free valuations, while others charge
✅ Solicitor/legal fees – some deals include free legals, while others require you to cover these costs
✅ Incentives – such as cashback, free valuations, or free legal services, which can make a deal more attractive
Sometimes, a mortgage with a slightly higher rate but lower fees and better incentives works out cheaper overall than one with a headline-grabbing low rate.
At Quick Mortgages, we analyse everything—not just the rate—to ensure you get the best mortgage for your situation. Whether that’s a high-profile new deal or a lesser-known product that offers better overall value, we make sure you get the right option for your circumstances.
Why using a broker is more important than ever
With all the excitement around mortgage rates, it’s easy to get caught up in the numbers. But as we’ve shown, the lowest rate isn’t always the best deal—it’s about what works best for your individual circumstances.
This is where having a mortgage broker really makes a difference. We:
- Look at the full picture, not just the headline rate
- Calculate the total cost of borrowing, ensuring you don’t end up paying more in fees
- Advise on the best mortgage for your loan size and needs
- Monitor the market constantly, so if a better deal comes up, we let you know
- Save you time and stress by doing all the research for you
With so many new deals being introduced and mortgage rates shifting frequently, having an expert on your side ensures you’re making the right choice, not just following the latest media buzz.
Conclusion: The best mortgage isn’t always the one making headlines
The launch of new low-rate mortgage deals has certainly created excitement, but an attractive rate doesn’t always mean an affordable mortgage. Fees, loan size, lender incentives, and the total cost over the fixed term all play a crucial role in determining the real best deal.
At Quick Mortgages, we keep a close eye on the market to ensure our clients get the best possible mortgage for their situation. If a new deal comes along that genuinely saves you more money, we’ll let you know. But we’ll also cut through the noise to make sure you’re not just picking a mortgage because it looks good on paper—we’ll help you find the one that’s actually right for you.
Because at the end of the day, it’s not just about the rate—it’s about the total cost.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
