7 Mortgage Myths That Cost UK Buyers Money
Mortgage myths cost people money. They delay decisions, push buyers towards the wrong deals, and stop some people from applying at all. From assumptions about deposits and credit scores to the belief that your bank will always give you the best rate, the wrong information can quickly become the most expensive part of buying or remortgaging a home.
Below are seven of the most common UK mortgage myths, and what actually tends to happen in the market.
1. Waiting for the perfect time to get a mortgage
There is no perfect time to get a mortgage. There will almost always feel like there’s something in the way or that you need clearer signals before starting. Getting a mortgage is a highly personal decision, what works for one buyer or lender may not work for another, and focusing too heavily on timing can hold up your progress.
Rather than waiting for a signal, look at whether the fundamentals are in place. Useful signs include:
| A stable income you've held for a reasonable length of time | |
| A clean credit profile, with no major credit applications or missed payments in the past three to six months | |
| A deposit ready, typically 5% to 20% of the property value, plus extra for moving costs and fees | |
| A stress-tested budget, where your monthly mortgage payments fit comfortably, leaving room for emergencies and potential rate changes |
Waiting for lower rates rarely pays off either. Rates move up and down, but waiting for them to drop can mean rising property prices in the meantime. Mortgage offers are usually valid for three to six months, so you can lock in a rate early while still keeping an eye out for a better deal before completion.
2. Your bank will automatically offer you the best deal
Most people assume their bank will automatically offer them the best mortgage deal. In reality, banks only offer rates and products from their own range. If you only speak to a single bank, you miss out on deals from every other lender in the market.
Loyalty doesn’t always pay off either. New customers often get lower rates than existing ones, and a low headline rate can be misleading, it might come with a high arrangement fee that pushes up the true cost. A broker can look across the whole market, compare rates from many different banks and building societies, and factor in fees so you’re comparing deals like for like.
3. A longer fixed rate is always the safest option
A longer fixed rate isn’t always the safest option. It offers security, but it doesn’t suit every situation. Fixing for longer protects you from rising rates and saves you repeating product fees, but it comes with trade-offs, steep early repayment charges if you need to exit, and the risk of missing out if rates fall.
The benefits are real:
- Payment certainty, because your monthly payment stays the same for the whole fixed term
- Fewer product fees, such as arrangement and legal costs, over time
- Less hassle, because you’re not remortgaging every two or three years
The drawbacks matter just as much:
- Longer fixes are inflexible, leaving the deal early because of a house move or life change can trigger significant early repayment charges
- If broader interest rates fall, you stay locked into the rate you agreed
- Lenders sometimes price a risk premium into longer-term products, so the rate itself can be higher than a shorter fix
The right term depends on your plans, not the length itself.
4. You only need to review your mortgage when the deal ends
Reviewing your mortgage only at the end of your deal can cost you. Checking earlier helps you save money, you can spot better rates months before your current deal finishes, and it’s worth reviewing whenever interest rates move or your home’s value changes.
If you wait too long, you may roll onto your lender’s standard variable rate, which is usually much higher than a new fixed deal. You can typically secure a new deal up to six months before your current one expires, and it’s worth checking whether overpayments while you’re on your current deal could reduce your balance and lower your overall costs.
5. You need a big deposit to get a mortgage
You don’t need a big deposit to get a mortgage. Most lenders accept a minimum of 5% of the property’s value, meaning you borrow the remaining 95%, known as the loan to value, or LTV. A larger deposit can unlock better options, but it isn’t essential.
A bigger deposit does have real advantages:
- Lower monthly payments, because you’re borrowing less overall
- A larger share of the property from day one, reducing the risk of negative equity
- A stronger position with lenders, which can mean better approval odds and better rates
Ultimately, it comes down to affordability and your personal circumstances. For some buyers, it can be worth getting on the property ladder sooner rather than later, as long as the lender is comfortable you can afford the monthly payments on a smaller deposit.
6. Bad credit means you’ll struggle to get approved
Bad credit can make getting a mortgage more difficult, but it doesn’t rule you out. All lenders have different criteria and risk appetites, one lender may be more open to your situation than the next.
You might face fewer choices, a larger deposit requirement and stricter checks, but a mortgage is still possible. Lenders look at the age of any issues, the type of debt and your financial stability now, so a clean recent track record can make a real difference to your options.
7. The lower the mortgage rate, the cheaper the mortgage
A lower rate doesn’t always mean a cheaper deal. Some low-rate mortgages come with high arrangement fees, and others carry conditions like large early repayment charges. A slightly higher rate with no fees can sometimes work out cheaper overall.
Always look at the full cost of a mortgage, not just the headline rate. A broker can compare deals fairly, factoring in fees, charges and the length of the deal, so you can see which one actually works out cheapest for you.
Talk to Heron Financial
If any of these myths have been holding you back, or if you just want to know where you actually stand, it’s worth having a proper conversation. We’ll look at your situation, explain your options in plain English, and help you find the right deal from across the market. No pressure, no jargon, just clear advice.
This article is general information, not personal financial advice.
FAQs
Is now a good time to get a mortgage in the UK?
There isn't a universally "good" time, it depends on your income, deposit, credit and plans. If the fundamentals are in place, waiting for the perfect rate can cost you more than moving now, because property prices and rates can both shift.
Is it cheaper to use a mortgage broker or go directly to a bank?
A broker searches the whole market and can often find better rates, terms or fees than a single bank. Even where fees apply, the total cost of the deal is what matters, and a broker can help compare that properly.
Should I fix my mortgage for two or five years?
It depends on your plans. A longer fix gives payment certainty and fewer product fees, but comes with early repayment charges and less flexibility. A shorter fix gives more room to react if rates fall or your situation changes.
How early can I remortgage before my deal ends?
You can usually secure a new deal up to six months before your current one expires, though this varies by lender. Starting the conversation early gives you the best chance of avoiding the standard variable rate.
What's the minimum deposit for a UK mortgage?
Most lenders accept a minimum deposit of 5% of the property value. A larger deposit can improve your rate and monthly payments, but it isn't essential to getting on the ladder.
Can I get a mortgage with bad credit in the UK?
Yes, in many cases. Lenders vary in how they treat credit issues, some are more flexible than others. The age, type and size of any issues all matter, as does your current financial stability.