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Finding the Best Mortgages to go for in 2023

With the UK housing market constantly changing, choosing the best mortgage product can be tricky, especially if you're not familiar with the many different options available. Fortunately, we're here to help.

9 min read

In this comprehensive guide, we'll explore the best mortgages to go for in 2023, so that you can make a confident and informed decision about your future home.

Fixed-Rate Mortgages: For Predictability and Stability

With so many different types of mortgages available, it can be challenging to decide which one is the best choice for you. However, if you're looking for a mortgage that offers predictability and stability, a fixed-rate mortgage might be the perfect fit for your needs.

A fixed-rate mortgage is a type of mortgage in which the interest rate remains the same for the entire term of the loan. This means that your monthly payments will remain the same too, giving you predictable and stable payments throughout the life of your mortgage. This can be a big advantage for many homeowners, as it makes it easier to plan your finances and budget for the future.

One of the biggest benefits of a fixed-rate mortgage is that it offers protection against rising interest rates. If interest rates were to rise, your monthly payments would remain the same, and you would be protected against higher costs. This offers a great deal of peace of mind to homeowners who are worried about fluctuating interest rates and the impact they could have on their finances.

Another advantage of a fixed-rate mortgage is that it makes it easier to plan for the future. With a fixed monthly payment, you can budget more effectively and plan for other expenses. Whether it's saving for your children's education, planning for retirement or putting money aside for a rainy day, a fixed-rate mortgage can help you achieve your financial goals more easily.

Fixed-rate mortgages are also easier to understand than other types of mortgages. With a fixed interest rate, you don't need to worry about complex calculations or sudden changes in your monthly payments. Everything is transparent, and you know exactly what you're paying every month, making it easier to budget and plan accordingly.

Discount Mortgages: Best for Short-Term Savvy Buyers

The UK mortgage market is ever-evolving and competitive, offering a range of options to fulfil different needs. One of the most alluring options, especially for short-term buyers, are discount mortgages. Discount mortgages are appealing because they offer an initial discount on the lender's standard variable rate for a specific period.

  1. What are discount mortgages?
    Discount mortgages are essentially variable-rate mortgages with an introductory discount on the lender's standard variable rate. This discount period usually lasts around two to five years. Once the discount period ends, you will be required to pay the standard variable rate, which can change at any time. It is worth noting that discount mortgages will not always be the cheapest mortgages on the market; their appeal is in the discounted rate period.
  2. Advantages of discount mortgages
    Despite the eventual increase in mortgage payments, discount mortgages offer many advantages. Firstly, the discounted initial period can offer significant savings on your mortgage payments, allowing you to put the extra cash into other expenses. Secondly, if the base rate falls, your mortgage payments will decrease automatically. Finally, if you want to move your mortgage to another lender, discount mortgages tend to have lower early repayment charges than other mortgage options.

  3. Disadvantages of discount mortgages
    As with all things in life, there are disadvantages to consider when you go for a discount mortgage. Firstly, if the base rate rises during the discounted period, your payments will increase accordingly, and you may find yourself with a higher monthly bill. Secondly, once the discounted period ends, your mortgage payments could become less affordable, making it difficult for some to keep up with payments. Finally, the option of variable interest rates can be daunting as they can change at any time.
  4. Why are they the best mortgages for short-term buyers?
    Discount mortgages are the best mortgages for short-term borrowers because they offer flexibility and affordability over a discounted period. Most short-term buyers tend to move homes within five years; having a cheaper mortgage during that initial period gives buyers the freedom to focus on other expenses such as renovation, furniture, or necessary repairs. Furthermore, the lower charges on early repayment allow for greater flexibility should you wish to move your mortgage to another lender.

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Tracker Mortgages: Excellent for Flexibility and Low-Interest Rates

Are you looking for a mortgage plan with a low-interest rate and flexible payment terms? Then, it's time to consider a tracker mortgage. This type of mortgage has become the go-to option for many homeowners in the UK due to its numerous benefits.

First things first, what is a tracker mortgage? It's a type of variable rate mortgage that tracks an underlying interest rate, such as the Bank of England base rate. Whenever the interest rate changes, your mortgage interest rate also changes. This means that your monthly mortgage payments could increase or decrease depending on the fluctuation in the interest rate.

One of the significant benefits of a tracker mortgage is its flexibility. You can usually overpay or make lump-sum payments without incurring any penalty fees. This enables you to pay off your mortgage earlier if you have some extra cash available. Moreover, if the interest rate falls, you'll pay less towards your mortgage, and if it rises, you'll pay more. However, if you're on a tight budget, it's important to note that your monthly payments could increase if the interest rate rises.

Tracker mortgages generally have a low-interest rate compared to other mortgage options. This is because the interest rate is tied to the base rate, which is usually low. As a result, you could save money over the course of your mortgage by opting for a tracker mortgage.

Another advantage of a tracker mortgage is that it's simpler than other mortgages like fixed-rate mortgages. You only need to keep track of the underlying interest rate, and your mortgage rate will automatically adjust accordingly. This reduces the stress of monitoring and comparing different mortgage rates to find the best deal.

When it comes to tracker mortgages, it's important to compare the interest rates and fees of different lenders. Some lenders may offer lower rates, but with higher fees, which could make your overall mortgage payments more expensive. It's advisable to seek the services of a mortgage adviser if you're struggling to navigate the options and choose the best tracker mortgage for you.

Capital and Interest Repayment Mortgages: Perfect for Paying off Your Mortgage

What is a capital and interest repayment mortgage?
A capital and interest repayment mortgage is a mortgage that involves paying back the interest and the capital borrowed over a set period of time, usually between 25 to 35 years. With each monthly payment, you pay off some of the capital borrowed, and the interest charged on that capital, so by the end of the mortgage term, you should have paid off both the capital and interest borrowed. Your monthly repayments will be higher with this type of mortgage compared to an interest-only mortgage, but it's a more effective and efficient way to pay off the mortgage in the long-term.

What are the benefits of a capital and interest repayment mortgage?
One of the most significant benefits of a capital and interest repayment mortgage is that you know exactly when your mortgage will be paid off, without any nasty surprises. You don't have to worry about finding a lump sum to pay off the mortgage at the end of the term, as you would if you opted for an interest-only mortgage. With a capital and interest repayment mortgage, you'll pay back both the capital borrowed and the interest on that capital, so you'll have repaid the entire mortgage by the end of the agreed term.

Is a capital and interest repayment mortgage perfect for you?
Whether a capital and interest repayment mortgage is perfect for you could depend on your individual needs and budget. If you're looking for an efficient way to pay off your mortgage, you should consider this type of mortgage. If you're looking to purchase a property in the long-term, opting for a capital and interest repayment mortgage is a great option. However, if you're looking to buy a property that's out of your budget, a different mortgage might be a better option.

It's also important to consider your commitments and budget. Capital and interest repayment mortgages generally have a higher monthly repayment, so it's essential to ensure that your budget can handle the monthly repayments. It's also a good idea to consider the longer-term effects of interest rates on your mortgage payments as rates can rise, making repayments larger.

Interest-Only Mortgages: Great if You're Looking to Invest Elsewhere

Last but not least, an option that has been gaining popularity recently is the interest-only mortgage. If you are looking for a mortgage that allows you to enjoy a low monthly payment while investing elsewhere, then an interest-only mortgage might just be the perfect fit for you.

What is an interest-only mortgage?

Simply put, an interest-only mortgage is a type of mortgage that allows you to only pay the interest portion of your mortgage payment every month. This means that you will not be paying off the principal amount of your mortgage, but instead, you will be investing that money in a separate account. Interest-only mortgages are typically valid for 2-5 years, depending on your lender. Once the term ends, you will have to either pay off the outstanding principal amount in full or refinance your mortgage.

How does an interest-only mortgage work?

With an interest-only mortgage, the interest rate is calculated based on the outstanding principal balance. Since you are not paying off the principal, your monthly repayment amount will be lower compared to a traditional mortgage payment. For instance, if you have a £200,000 interest-only mortgage with a 3% interest rate, then your monthly payment will be £500 (based on interest-only). However, if you go for a repayment mortgage, your monthly payments will be around £1,000.

Potential Risks of an interest-only mortgage

Although interest-only mortgages may present several benefits, it is essential to be aware of the potential risks. Firstly, you will not be paying off the principal amount of your mortgage, which means that you may end up with a considerable debt balance at the end of the term. Secondly, if the value of your property falls below the outstanding balance of your mortgage, you may end up with negative equity. Finally, if your investment opportunities do not yield a return greater than your mortgage interest rate, you will not save any money.


Choosing the right mortgage product can be a daunting task, but hopefully, this comprehensive guide has provided you with the knowledge and tools you need to make an informed decision in 2023. Whether you're looking for stability or flexibility, or a combination of both, there's a mortgage option out there that will fit your needs. Remember to always read the terms and conditions carefully and consult with a mortgage advisor if you're unsure about which mortgage product to choose. Happy House hunting!

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