Mortgage Comparison Calculator

Compare Your Mortgage Options

Per FCA transparency requirements, the lowest rate isn't always the cheapest mortgage. A deal with a higher rate but lower fees might cost you less overall—or vice versa. This calculator shows you the true cost. Use it alongside our mortgage calculator for payment comparisons.

Understanding Your Results

The calculator ranks mortgages by true cost over the initial deal period. Here's what each figure means.

True Cost Explained

True cost combines:

• Total interest paid during the fixed period
• All upfront fees
• Minus any cashback or incentives

This gives you a single comparable figure for each option.

Fee Impact

Per FCA fee disclosure rules, fees affect smaller loans more significantly. On a £150,000 mortgage, a £1,500 fee adds 1% to your effective borrowing. On a £400,000 mortgage, the same fee adds only 0.375%.

The pattern is clear:

• Smaller loans: Favour low-fee products
• Larger loans: Rate matters more than fees

Rate vs Fees Trade-Off

Here's the framework: calculate how long it takes for a lower rate to offset higher fees.

Example:

• Mortgage A: 4.0% rate, £1,500 fee
• Mortgage B: 4.2% rate, £0 fee
• Loan amount: £250,000

The 0.2% rate difference saves roughly £42 per month. To recoup £1,500 in fees: 1,500 ÷ 42 = 36 months.

Per UK Finance analysis, if your fix is 2 years (24 months), Mortgage B might be cheaper. If it's 5 years (60 months), Mortgage A likely wins.

What to Compare

When entering mortgage details, include all relevant costs and incentives.

Interest Rate

The headline rate determines your monthly payment and the interest portion of total cost. Small differences compound. Consider how this fits with your property purchase timeline.

Fees to Include

Per FCA transparency rules, arrangement fee: Charged by the lender to set up the mortgage. Ranges from £0 to £2,000+. Can usually be added to the loan (but you'll pay interest on it).

Valuation fee: The lender's property assessment. Ranges from £0 (often free for certain products) to £500+. Usually paid upfront.

Legal fee contribution: Some mortgages include free legal work for remortgages, or contribute towards purchase legal fees. Worth £300-500 typically.

Cashback and Incentives

Some mortgages offer:

• Cashback: £250-1,000 paid after completion
• Legal fee coverage: Free conveyancing
• Valuation fee waiver: No charge for valuation

These reduce your true cost and should be factored in.

How We Calculate

Our methodology compares total cost over the initial fixed period.

Total Cost Calculation

For each mortgage:

1. Calculate monthly payment using the stated rate
2. Multiply by fix length (months) for total payments
3. Add all fees (arrangement, valuation, etc.)
4. Subtract incentives (cashback, fee contributions)
5. Result: true cost for the fixed period

What's Included

This comparison covers:

• Interest paid during fixed period
• Upfront fees
• Cashback and incentives

Assumptions Made

The calculator assumes:

• Rates are fixed for the stated period
• Standard repayment mortgage
• No overpayments
• Fees paid upfront (not added to loan)

If you add fees to your loan, the true cost is slightly higher (you pay interest on the fee amount).

What's Not Included

This comparison doesn't account for:

• What happens after the fixed period
• Potential overpayment benefits
• Early repayment scenarios
• Insurance requirements

For a complete picture, consider these factors too.

Using Your Comparison

The cheapest total cost isn't always the "best" mortgage. Consider these additional factors. Your conveyancing solicitor can explain mortgage terms you don't understand.

Cheapest Isn't Always Best

Beyond cost, consider:

• Lender reputation: Service quality varies significantly
• Flexibility: Overpayment limits, portability, offset options
• Early repayment charges: What if you need to exit early?
• Application likelihood: Some lenders are stricter

Flexibility Factors

Think about your situation:

• Might you move during the fix?
• Could you make significant overpayments?
• Is the property standard or unusual?
• Any employment complexity?

A slightly more expensive mortgage with better flexibility might be worth the premium.

Service Considerations

Lenders differ in:

• Application processing speed
• Communication quality
• Problem resolution
• Willingness to accommodate complexity

If time is critical or your case has complexity, service matters.

When Small Differences Don't Matter

The honest answer: if two mortgages are within £200-300 over the fix period, other factors should probably decide. The stress of choosing the "wrong" one isn't worth it for such small amounts.

Focus on:

• Getting a competitive rate
• Terms that suit your situation
• A lender you trust
• Manageable monthly payments

Should I add the arrangement fee to my mortgage?

Adding fees to your mortgage keeps cash available but costs more long-term (you pay interest on the fee). For a £1,000 fee at 4.5% over 25 years, you'd pay roughly £400 in interest on the fee alone. If you have the cash, paying upfront is usually cheaper.

Why do some mortgages have no fees?

Fee-free mortgages typically have slightly higher rates. The lender recovers the cost through interest instead. Whether this is better depends on loan size, fix length, and your cash situation. This calculator helps you compare both approaches.

How do I factor in legal fee savings?

If a mortgage offers free legal work (common for remortgages), add the approximate value (£300-500) to the cashback/incentives field. This reduces the true cost accordingly.

Does the comparison change for different loan sizes?

Yes, significantly. Fees have more impact on smaller loans. On a £100,000 mortgage, a £1,000 fee is 1% of the loan. On a £400,000 mortgage, it's only 0.25%. Rate differences matter more for larger loans.

Beyond the Numbers

This calculator shows you the financial comparison. But mortgages are about more than minimising cost—they're about fitting your life.

A broker can help you balance cost with other factors: your employment situation, property type, timeline, and risk tolerance. Sometimes paying slightly more for the right product is the wise choice.