UK MORTGAGE FAQs

UK Mortgage FAQ Guide

Mortgages are one of the biggest financial commitments most people will ever make. They come with complex terminology, changing rates, and affordability rules that can leave borrowers confused. Whether you are a first-time buyer, remortgaging, or considering a buy-to-let investment, understanding how the UK mortgage market works is essential.

This guide answers more than 140 of the most common mortgage-related questions in the UK — excluding those related to Shariah or Islamic finance. It’s designed to give you plain-English, detailed explanations that will help you feel more informed when reviewing your options.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Will…?

Will mortgage rates go down?

Mortgage rates in the UK move based on Bank of England policy, market expectations, and competition between lenders. If inflation continues to fall, market forecasts suggest that rates may ease over time. However, mortgage rates may not fall in line with base rate cuts immediately, as lenders also look at swap rates and their own funding costs. For homeowners coming to the end of a fixed deal, it’s worth keeping an eye on market movements, but also having a plan in case rates remain elevated. Remortgage guidance can help you explore your options before your current deal expires.

Will mortgage rates return to 2%?

It’s very unlikely that UK mortgage rates will return to 2% in the near future. Those historically low rates reflected a period of exceptionally low inflation and aggressive monetary policy following the financial crisis and during the pandemic. Today’s economic environment is different. While lower rates may reappear in the long term, borrowers should prepare for rates to remain higher than the ultra-low levels seen in 2020–21.

Will mortgage payments go down?

Mortgage payments could go down if you switch to a lower interest rate deal or if lenders cut rates in response to improving economic conditions. However, payments may also rise if rates increase or if your fixed deal expires and you move to a standard variable rate (SVR). Budgeting for potential changes is essential, especially for those nearing the end of their fixed-rate period.

Will mortgage affordability improve?

Affordability could improve if wages rise faster than living costs, or if lenders relax their lending criteria. However, affordability can also tighten if interest rates rise, reducing the amount lenders are willing to offer. Using affordability calculators and reviewing spending habits can give you an idea of how much you may be able to borrow. Speaking to a qualified mortgage adviser can help you understand your borrowing potential.

Are…?

Are mortgage rates going down?

Some lenders have begun to reduce rates when market conditions stabilise. However, changes are often gradual, and mortgage rates remain well above the ultra-low levels of recent years. It’s common to see small week-to-week movements, as lenders adjust pricing to reflect swap rate changes and market sentiment.

Are mortgages becoming more expensive?

Yes. Compared with 2020 and 2021, when fixed deals below 2% were available, mortgages are now significantly more expensive. This is due to inflationary pressures, higher base rates, and tighter market conditions. Even if rates fall slightly, the overall cost of borrowing is higher than in the past few years.

Are mortgage offers guaranteed once issued?

No. Even after an offer is issued, lenders can withdraw it before completion if your financial situation changes, if the property value is reassessed, or if the lender withdraws the product from the market. It’s important to move quickly once an offer is secured, and to avoid major financial changes (such as taking on new debt) until the mortgage completes.

Can…?

Can mortgage offers be withdrawn?

Yes. Mortgage offers can be withdrawn at any time before completion. Reasons may include changes to your income or credit record, or if the lender reassesses the property value. This can be stressful, so it’s best to ensure your application is accurate and up to date, and to complete the process promptly once you have an offer.

Can mortgage interest be deducted from tax?

For homeowners, mortgage interest is not tax-deductible. For landlords, mortgage interest relief was phased out in 2020. Landlords now receive a basic rate tax credit worth 20% of mortgage interest paid, regardless of their tax band. This has increased the effective tax burden for higher-rate taxpayers with buy-to-let properties.

Can mortgage applications be declined?

Yes. Lenders decline applications for reasons including poor credit history, insufficient income, too much existing debt, or a small deposit. Declines can also occur if the property doesn’t meet lending criteria, for example if it’s non-standard construction. Checking your credit report and getting guidance before applying can reduce the risk of rejection.

How…?

How do mortgages work?

A mortgage is a loan secured on property. You borrow money to buy a home or investment property and repay it over an agreed term, usually 25 years. Each monthly payment covers interest and, in the case of a repayment mortgage, part of the loan balance. If you don’t keep up repayments, the lender has the right to repossess the property. Mortgages are regulated, and lenders must check affordability before offering you a deal.

How are mortgage payments calculated?

Payments are calculated based on the loan size, interest rate, and term. Repayment mortgages gradually reduce your debt while covering interest, whereas interest-only mortgages require you to repay the full loan at the end of the term. Online calculators can provide estimates, but lenders will assess affordability using detailed information about your income and outgoings.

How do mortgage brokers get paid?

Mortgage brokers may charge fees, receive commission from lenders, or a combination of both. Some brokers are free to you, while others charge a fixed fee or a percentage of the loan amount. Always ask upfront about fees, so you understand the total cost. A qualified mortgage adviser can explain whether a fee-charging broker is right for your needs.

How does remortgaging work?

Remortgaging means switching to a new mortgage deal, either with your current lender or a different one. This is common when a fixed-rate period ends and you want to avoid moving onto a higher standard variable rate. Remortgaging can help reduce payments, consolidate debts, or release equity, but comes with costs such as arrangement fees or legal fees. Remortgage guidance can help you plan ahead.

What…?

What is a mortgage?

A mortgage is a long-term loan secured against property. In the UK, mortgages are typically repaid over 25 years, but terms can be shorter or longer. Most mortgages are either repayment (where you gradually pay off the debt) or interest-only (where you repay only interest until the end, then clear the loan in a lump sum). Mortgages are essential for most homebuyers, as few can afford to buy property outright.

What mortgage can I afford?

Affordability depends on your income, outgoings, deposit, and credit history. Lenders use affordability calculators and stress tests to check whether you could still make repayments if interest rates rise. A larger deposit usually increases the amount you can borrow. For personalised guidance, it’s best to speak to a mortgage adviser.

What happens if a mortgage offer expires?

If your offer expires before completion, you may need to reapply or request an extension. Some lenders will extend offers in cases of delays, while others may require a fresh application. This can be an issue in chains or with new-build purchases, where completion is delayed.

Which…?

Which mortgage type is right for me?

The right mortgage type depends on your circumstances. Fixed-rate mortgages offer certainty of payments for a set term, while variable or tracker mortgages can be cheaper but less predictable. Offset mortgages may suit borrowers with savings. There is no universal “best” mortgage; suitability depends on your income, risk appetite, and long-term plans.

Which mortgage lenders are the biggest in the UK?

The UK’s largest lenders include Halifax, Nationwide, Barclays, Santander, and NatWest. However, building societies and specialist lenders may also offer competitive deals. Availability depends on your deposit, credit history, and the type of mortgage you need. Comparing options across the market is important.

Who…?

Who pays mortgage broker fees?

Sometimes the borrower pays, and in most cases the the lender does. Brokers will disclose fees upfront. It’s worth weighing the value of professional advice against the potential cost savings.

Who sets mortgage rates?

The Bank of England sets the base rate, which influences mortgage pricing. But each lender decides its own rates, based on funding costs, swap rates, competition, and regulatory capital requirements. That’s why mortgage rates can differ between banks, even when the base rate is unchanged.

Why…?

Why are mortgage rates moving higher?

Mortgage rates are higher than recent years because inflation has risen, prompting the Bank of England to increase the base rate. Lenders also face higher funding costs and tighter regulation. Together, these factors push up the rates they charge borrowers.

Why are mortgage applications rejected?

Applications may be rejected due to affordability, poor credit history, insufficient deposit, or property issues. Each lender has its own criteria, so being rejected by one does not mean you’ll be rejected everywhere.

Why are mortgage rates not falling as base rate falls?

Fixed mortgage rates are based largely on swap rates, which reflect future market expectations. If investors believe rates will stay high, swap rates — and mortgage rates — may remain elevated, even if the base rate is cut.

Information-Only Reminder

This guide is for information purposes only and does not constitute mortgage advice. Mortgage products, rates and criteria vary between lenders and change frequently. For tailored recommendations, speak to Mortgage One Finance to explore your options with a qualified mortgage adviser.