Borrowers shouldn’t take headline mortgage rates at face-value


According to a recent Mortgage Saver Review by online mortgage broker Trussle, headline mortgage rates are misleading borrowers and could be costing them thousands of pounds.

At first glance, it may seem that the lowest rates are the cheapest option, but a higher rate could actually be the better choice once you have factored in fees and incentives.

Mortgage deals are presented in many different ways to prospective borrowers, but the key focus is usually the headline interest rate, as a low rate will draw a customer’s attention. The problem is that the headline rate cannot tell you how truly competitive the mortgage deal is compared to others, and the fees and charges are usually buried away in the small print.

Choosing the best deal can be a challenge

Choosing the best mortgage deal is a stressful experience for many borrowers. Having to make sense of rates, fees and incentives can be a challenge – especially when there is no industry standard in the presentation of the facts. Of 2,000 borrowers surveyed by Trussle, fewer than 30% understood all the information presented by lenders, and 46% found the whole process confusing. 9% of borrowers even felt that the deals were hiding important information. Overall, 74% of borrowers want all fees and charges to be rolled up into an easily comparable, total true cost for the period of the deal.

Helping borrowers make the right choice

Trussle took the information of the ten lowest two-year fixed rate deals available on the market from 72 lenders (with a loan-to-value of 60%), and ranked them based on their initial rate.

MSR table 1

Then they re-ranked the same 72 deals by their ‘true-cost’, taking into account the fees and incentives associated with each mortgage deal.

MSR table 2 1

What the data shows is that the lowest-rate deal on the market can be beaten by a higher-rate deal when the true cost is compared. For example, Santander leads the two-year fixed market with an attractive low headline rate of 1.09%, but when the products are re-ranked with their true cost (combining fees and incentives), it drops to 21st in the rankings. Danske Bank’s higher rate of 1.36%, which some borrowers wouldn’t consider at first glance, jumps from 15th place to first place based on its true cost.

Trussle is calling for the introduction of an industry-wide ‘true-cost’ metric that would take into account the additional costs and offered incentives with each mortgage. This would give borrowers a true picture of how one mortgage deal compares to another, enabling them to make a truly informed decision.

It’s time for mortgage costs to be transparent

Transparency in the form of the ‘true-cost’ would certainly make choosing a mortgage deal simpler for many. In the meantime, borrowers can help make sense of the mortgage jungle by using the information available on or

MoneyFacts Best Buy charts are sorted by APRC (annual percentage rate charge), so you can be sure that the deal at the top is the one with the lowest rates and fees for the term or mortgage type you are seeking. The Money Saving Expert mortgage best buys tool shows you which deal is really the cheapest overall, taking interest and fees into account to give you the total cost of the mortgage for one year.

Until mortgage lenders all agree to present mortgage deals in a ‘true-cost’ comparable format, borrowers will have to actively investigate, review and evaluate the products available to make sure they are getting the best mortgage rate, and not just the one that on the face of it looks like a great deal.

Source for tables:

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Borrowers shouldn’t take headline mortgage rates at face-value

Borrowers shouldn’t take headline mortgage rates at face-value


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.