Best Mortgage Rates Scotland
The best mortgage rates in Scotland often differ from those in other parts of the UK. As such, it's important to check the deals available specifically for buying a house in Scotland, or instead remortgaging there.
To help you navigate this area, we've created a guide to shed light on the topic as well as answer the most relevant questions. We’ll go over:
Are interest rates in Scotland different to other parts of the UK?
Yes, they can be. Regional factors, such as local property markets and economic conditions, can influence the interest rates offered to buyers and homeowners in Scotland. Therefore, it's important to explore these unique deals by consulting with advisors who have a strong presence in the Scottish market.
While not all UK lenders offer mortgages in Scotland, most major banks do provide them. Additionally, there are mortgage deals which are exclusive to those looking to either obtain a mortgage or remortgage in Scotland.
What is the mortgage interest rate in Scotland?
The average two-year fixed-rate mortgage in Scotland stands somewhere around 5.75%, while the average five-year fixed rate is about 5.35%.
To give more specific examples, for a discounted variable rate with a 40% deposit (60% LTV), interest rates in Scotland start at around 5.45%. For a 20% deposit (80% LTV), you can expect rates to begin at approximately 5.78% on the lender's standard variable rate (SVR).
Interest rates in Scotland for first-time buyers
First-time buyers in Scotland, as well as in the rest of the UK, typically face slightly higher interest rates. However, this is not specifically due to their status as first-time buyers, but rather a consequence of their LTV ratio.
For instance, it's common for first-time buyers to opt for 90% or 95% LTV mortgages, which generally carry higher interest rates due to the increased risk for lenders. Higher LTV ratios mean the borrower has a smaller mortgage deposit, which translates to a larger loan amount relative to the property's value.
This increased risk is often reflected in the higher interest rates offered to these buyers. Moreover, first-time buyers usually have shorter credit histories or less financial stability as opposed to seasoned buyers, which can further impact the interest rates they are offered.
Best remortgage rates in Scotland
As with initial mortgages, the best remortgage rates in Scotland are typically available to those with a good credit score, stable income, and a substantial mortgage deposit. Likewise, some lenders offer exclusive deals for existing customers and those who are switching from another mortgage provider. Conversely, if you have a history of bad credit, you are likely to be offered less favourable interest rates.
If you want to view your credit record to increase your chances of securing a competitive deal before you apply, you can use our free credit check tool (£14.99 per month after the free 30-day trial). Using it will help you to detect any potential mistakes or fraudulent activity on your profile, so that you can deal effectively with such problems. The trial and subscription can be cancelled at any time.
Buy-to-let mortgage rates in Scotland
Buy-to-let mortgage rates in Scotland are comparable to those in the rest of the UK. On average, these rates can be about one percentage point higher than residential mortgage rates. So, if the average five-year fixed-rate mortgage in Scotland is 5.35%, the average buy-to-let rate would be approximately 6.35%.
These higher rates reflect the increased level of risk for lenders associated with rental properties. Buy-to-let mortgages also often require larger deposits for this reason, typically around 25% (85% LTV) or more, and imply stricter lending criteria. Additionally, lenders consider factors such as projected rental income, the borrower's experience as a landlord, and the property's location when determining the interest rate.
How to compare mortgage rates in Scotland
While rate tables provide a frame of reference for understanding the available deals, they have limitations as they are not tailored to your specific needs. Therefore, the best way to compare mortgage rates and deals is to use an expert mortgage broker who specialises in Scottish mortgages.
Using a broker offers several benefits, including access to the latest rates from across the Scottish market, recommendations for deals that best fit your circumstances, advice on choosing the right mortgage type, and assistance in securing the best rate alongside completing your application successfully.
At The Mortgage Genie, we're dedicated to helping people secure a spot on the property ladder, wherever they are in the UK. Contact us at 01915809890 to get connected with an experienced professional who understands your financial circumstances and individual situation. And why not see how much you could borrow up to today by using our mortgage calculator?
This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. You should make an appointment to receive mortgage advice which will based on your needs and circumstances.
