You’ve probably heard that getting a mortgage is complicated. And if we’re being honest, it can be—but it doesn’t have to feel that way.
The UK mortgage market in 2025 is in an interesting spot. After the Bank of England hiked rates to 5.25% through 2023, we’re now seeing cuts filter through. The average rate on new mortgages has dropped to around 4.17%, down from the peaks we saw last year. Approvals are ticking up, house prices have steadied after their 2023 wobble, and there’s cautious optimism in the air.
But here’s the thing: even with rates falling, borrowing is still tougher than it was a few years ago. Lenders are pickier. Affordability checks are stricter. And if you don’t know what you’re doing, you can easily end up paying more than you need to—or worse, getting rejected.
This guide cuts through the noise. Whether you’re buying your first home, remortgaging, self-employed, or dealing with less-than-perfect credit, you’ll find practical advice that actually works in today’s market.
Understanding Your Mortgage Options
Let’s start with the basics: what type of mortgage makes sense for you?
Most people go for a fixed-rate mortgage. You lock in your rate for two, five, or even ten years, which means your monthly payments stay the same regardless of what the Bank of England does. Right now, with rates still elevated but falling, a five-year fix gives you certainty without gambling on where rates might land in a year or two.
Then there are tracker and discount variable-rate mortgages. These move with the Bank of England base rate (or your lender’s standard variable rate). If you think rates will keep falling and you can handle some uncertainty in your monthly budget, a tracker could save you money. But be honest with yourself—can you actually afford a jump in payments if rates spike again?
Repayment mortgages are the standard: you pay off both the interest and the capital each month, so at the end of the term, the property is yours. Interest-only mortgages are less common now, mostly used in buy-to-let or by high-net-worth borrowers who have a credible plan to repay the capital later. Unless you’re an experienced investor, stick with repayment.
One option that doesn’t get enough attention is an offset mortgage. If you’re self-employed or have chunky savings sitting in a current account, an offset lets you use that cash to reduce the interest you pay without locking it away. It’s not for everyone, but for the right person, it’s brilliant.
Getting Your Finances in Shape
Here’s where most people stumble: they think getting a mortgage is about having a deposit and a job. It’s not. It’s about proving to a lender that you can afford the loan, now and in the future.
Lenders stress-test your affordability, often using a rate several percentage points higher than what you’ll actually pay. They want to see that you could still afford payments if rates rose. They’ll scrutinise your bank statements, looking for regular income, existing debts, and spending patterns. Gambling transactions? Unexplained transfers? Multiple overdrafts? These can raise red flags.
Your deposit matters, obviously. The more you put down, the better your rate. We’re seeing more high loan-to-value lending in 2025—over 6% of new mortgages have LTVs above 90%, the highest share since 2008—but those deals still come with higher rates and stricter criteria. If you can scrape together 15% or 20%, you’ll unlock meaningfully better options.
Credit scores aren’t everything, but they matter. Check your reports from Experian, Equifax, and TransUnion. Dispute any errors. Clear small debts. Get on the electoral roll. Reduce your credit utilisation. These aren’t magic tricks—they’re hygiene factors that lenders actually look at.
The Application Process: What Actually Happens
Most people think the mortgage process is mysterious. It’s not—it’s just bureaucratic.
You start with a decision in principle (DIP), which is a soft indication of how much you can borrow. This usually takes a few minutes online and gives you confidence when house-hunting. Once your offer is accepted, you submit a full mortgage application with all your documents: ID, proof of address, bank statements, payslips (or accounts if you’re self-employed), and proof of deposit.
The lender orders a valuation to make sure the property is worth what you’re paying. This isn’t a survey—it’s a box-ticking exercise for the lender’s benefit. If you want to know about structural issues, pay for your own survey.
Then comes underwriting, where a human (or increasingly, an algorithm) reviews your application. If everything checks out, you get a formal mortgage offer. From there, your solicitor handles the legal work, and a few weeks later, you exchange contracts and complete.
In practice, this takes 8 to 12 weeks from offer acceptance to moving day. It can be faster or slower depending on the property, the lender, and how organised you are with documents.
Tailored Advice for Different Borrowers
First-Time Buyers
Save as much as you can for a deposit, but don’t obsess over hitting 20% if it means waiting years. Schemes like shared ownership and First Homes (discounted new-builds for local buyers and key workers) can help you get on the ladder sooner. Just make sure you understand the terms—especially service charges and restrictions on resale for shared ownership.
Get a DIP before you start viewing properties seriously. Estate agents and sellers take you more seriously if you’re mortgage-ready.
Remortgagers
If your fixed rate is ending soon, start looking six months before it expires. Rates have been falling since March 2025, but that doesn’t mean you should wait and hope—lenders can pull deals overnight. A product transfer with your current lender is often quicker and cheaper than remortgaging elsewhere, but don’t assume it’s the best deal. Compare properly.
Self-Employed Borrowers
You’ll need at least two years of accounts and SA302 tax calculations. Lenders vary massively in how they treat self-employed income—some average it, others use the latest year, some are generous with retained profits in a limited company, others aren’t. This is where working with a fee-free mortgage broker who knows lender criteria inside-out can save you weeks of trial and error.
Keep your business and personal finances clean. Lenders want to see consistent, sustainable income, not big lumps followed by months of nothing.
Adverse Credit
Missed payments, defaults, CCJs—these don’t automatically disqualify you, but they do limit your options and push up your rate. Specialist lenders exist for this, and their criteria are surprisingly varied. One lender might decline you for a default from two years ago; another might accept it if you’ve had 12 months of clean credit since.
Pull your credit reports, clear what you can, and build a recent track record of on-time payments. If you can wait for older issues to age off (six years for most), that helps too.
Cutting Costs and Avoiding Pitfalls
Mortgages come with fees: arrangement fees, booking fees, valuation fees, legal fees, and more. These add up fast. Sometimes a low-rate deal with a £2,000 fee costs more over the fixed period than a slightly higher rate with no fee. Do the maths properly—calculate the total cost over the term you’re fixing for, not just the headline rate.
Negotiate where you can. Some lenders waive fees as part of promotions. Some solicitors offer cashback