Every lender will consider different criteria, but these are some of the common elements they’ll look at when deciding which interest rate to offer.
Credit history
Your credit score influences the mortgage rate you’re offered, as it shows your track record of paying off loans and whether you’re likely to keep up with your mortgage repayments.
Deposit size
The money you borrow when you take out a mortgage is worked out by taking away your deposit from the purchase price of your new home. A higher deposit gives a better loan to value ratio. A better loan to value ratio means you’ll probably be offered lower interest rate deals.
Length of the mortgage term
If you choose a mortgage that’s repaid over a shorter period, you may have higher monthly payments, but pay less interest.
If your mortgage repayments are spread over a longer time, you may pay less on your repayments, but more interest. A mortgage adviser can help to recommend a term that works for your circumstances.