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Reviewing the UK’s best mortgage lenders
To buy a home, you’ll need to borrow money from a mortgage lender. It used to be the case that you’d have to go to a building society to get a mortgage, but these days most banks offer mortgage products for homeowners.
In fact, there are more than 90 mortgage lenders on the market, who together offer over 11,000 deals. You might hear mention of 'major lenders' and 'specialist lenders'.
Major lenders include what’s commonly referred to as ‘The Big Six’ - that’s Lloyds (including Halifax), Nationwide, Santander, RBS, Barclays, and HSBC - because these six lenders collectively account for the majority of all mortgage lending in the UK.(1)
How many mortgage lenders are there?
There are around 100 mortgage lenders in the UK, which are mainly banks and building societies. Some are household names and others are specialists who you might not have heard of.
These are the top five largest lenders in the UK, according to the latest data from UK Finance:
Specialist mortgage lenders
Self-employed mortgage lenders
Historically it's been more difficult to get a mortgage if you're self-employed, but these days many lenders are more lenient about lending money to those in this situation.
For example, if you've saved enough for a good sized deposit, have a healthy credit rating, and have up to two years accounts showing a steady income, you'll likely have a chance of getting a mortgage with one of these lenders.
For those who don't have a large deposit, perfect credit history, or years of accounts available, there are specialist lenders who will also consider lending to you.
Bad credit mortgage lenders
If you have bad credit, this doesn't immediately mean you're not going to be eligible to get a mortgage. However it may reduce the number of lenders willing to assess your application.
If you're worried about your credit rating, it's worth sharing a copy of your credit report with your mortgage broker so they can look into which lenders might be most suitable to consider when searching for the right deal.
While there are lenders who are happy to help those with more severe credit issues, they'll typically offer less competitive deals with higher interest rates.
Help-to-buy mortgage lenders
It's important to remember that you'll need to apply for the equity loan directly on the government website to secure the funding for the deposit.
When picking a lender, your mortgage broker will be able to confirm the details of the equity loan, how this impacts your application, and the implications for when you remortgage in the future.
Shared ownership mortgage lenders
Unfortunately, not every lender offers shared ownership mortgages, so if you’re unsure about which ones do, it could help to seek help from a mortgage broker.
Some lenders that do offer shared ownership are Lloyds, Leeds Building Society, Nationwide and Kent Reliance.
Online mortgage lenders
Online lenders, such as Digital Mortgages, are newer entrants to the market. They typically provide residential mortgages, but offer a purely digital experience rather than using call centers or branches.
Bear in mind that you'll need a smartphone available to apply. This applies to all applicants to the mortgage.
The benefits of using an online mortgage lender generally include a faster service that traditional non-digital lenders, and having the status of your application available at the click of a button.
Finding the best mortgage lenders
When it comes to finding you a mortgage, we'll always search the market for the most suitable deal for your specific circumstances.
However, it's useful to know which lenders receive the least number of complaints, which process applications the quickest, and which will lend the most based on your income.
For example, knowing that Barclays and HSBC took an average of 22 days to process applications for our customers over a 12 month period (the longest of the 'big six' lenders) might encourage you to start the application process a little earlier than planned.
So we've captured this data and more, to give you an idea of which lenders are top for these criteria and prepare you for a future application.
Compare mortgage lenders
As we’ve seen, many lenders provide loans to help you buy a residential home, while some cater for those looking to purchase a buy-to-let property. Others cater for first-time buyers, and those with other more specific needs. Some cater exclusively to those with poor credit history, for example.
We’ve also seen that thousands of mortgage deals are offered between between them. This is to accommodate the wide-ranging needs of today’s homeowners, which vary more than ever before; working later in life, having more flexible jobs, or receiving financial assistance from family - to give just a few examples.
While there are many types of lenders, choosing the right one needn’t be complicated. A mortgage broker like Trussle will always make sure they recommend a suitable deal from the right lender for your needs.
Our mortgage lender reviews
Lenders that accept 5% deposits
There are around 90 lenders in the UK and about a third of them offer mortgages for people with a 5% deposit.
These lenders include:¹
Post Office/Bank of Ireland
Lenders don’t stipulate any special criteria to get this type of mortgage, but you’ll need a good credit score.
The drawbacks of putting down a 5% deposit
Putting down only a 5% deposit on a home may seem the answer to your prayers, as it could get you on the property ladder much faster than you’d hoped.
But there are considerable disadvantages to putting down such a small deposit:
lenders will charge a higher rate
your monthly repayments will be higher than they would be with a larger deposit
you’ll end up paying more in total than you would with a larger deposit because of the amount of interest you’ll have to pay
most lenders are looking for a close to perfect credit score
Is buying a home with a 5% deposit right for you?
Think carefully before deciding to take out a mortgage with a 5% deposit.
One of the first things you need to make sure of is that you can afford the repayments. If you’re not certain what they’d be, get some free advice from a mortgage broker.
“A mortgage with a 5% deposit can be a big help, but whenever you’re borrowing money you need to be sure you can pay it back,” said Sam Amidi, a mortgage adviser at Trussle.
Frequently asked questions (FAQs)
Which mortgage lender lends the most?
Each lender will assess your circumstances against their own criteria, meaning the answer will be different for everyone.
The important thing to remember is that you should be looking for the most suitable mortgage deal offered by a wide range of lenders on the market. A mortgage broker, like us at Trussle, can help you with this.
What documents do mortgage lenders typically need?
Lenders will typically ask for three months worth of bank statements and payslips, a photo ID, and an address ID. Depending on your credit score, they may also ask for a copy of your credit history.
Will a mortgage lender help me with a bad credit score?
A number of mortgage lenders specialise in lending to those who may not have the best credit history. Speaking with a mortgage broker will help you find the most suitable specialist lender for your circumstances.
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Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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