Mortgage Comparison Tables Explained

Mortgage comparison tables, rate tables, best buy tables: call them what you will, they can be vary useful. However, by the same token you do need to understand what all the various pieces of data in the tables are to get the maximum benefit from them. Here we look at the fields you most usually see and what they mean.

The pay rate is the interest rate that is charged, and this is a percentage: for instance 5%. It is quite usual for these to be expressed with two decimal points, every extra 0.0x% can significantly affect the total sum paid back due to the high value and long duration of a mortgage.

The deal period tells you how long the mortgage deal referred to lasts, whilst the standard rate refers to the standard variable rate of that lender: this is what most mortgages revert to after the special deal or discount rate has expired.

If you see a field called maximum LTV, this refers to the size of mortgage the lender is willing to give you relative to the cost of the property. So if the property is worth Ł100,000 then a LTV of 90% means they would be willing to lend you up to Ł90,000 as a mortgage.

You may see fields such as cashback, this is an amount they give you usually as a one off sum once the mortgage completes. There are then fields that specify the amount you will pay back on two basis, firstly interest only and then repayment mortgage, and these are typically based on a Ł100,000 mortgage. These are the monthly payment amounts and are useful for you to perform a quick comparison between different rows in the table.

Income multiples refer to how much your income can be multiplied up to cover the mortgage. Thus 3x income means they will lend you up to three times salary. These are often split into single and joint; joint will typically be less than single though sometimes it is the same. There is usually also a statement of the total fees that are charged in arranging a mortgage, and also a field telling you how long you are tied in for, this is often called the ERC time or ERC period, standing for early repayment charges, and there will be penalties in place if you leave the mortgage deal during that tied in period.

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Mortgage Comparison Tables Explained

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