When it comes to mortgages, the finest mortgage lenders are those who can offer you a package that fits your needs and circumstances.
Here’s our roundup of the top 10 mortgage lenders UK.
Finding the greatest mortgage lender and offer for you is critical, because getting a mortgage is one of the most important financial decisions you’ll ever make.
In any mortgage search, learning as much as you can about different mortgage lenders, including the products and features they offer and the eligibility criteria you must satisfy, is critical.
The mortgage rate you can receive is likely to be your most significant factor, but to assist you in your search, we’ve looked at aspects that might be neglected, such as the benefits and services mortgage lenders provide.
Our mortgage lender ratings are based on our expert judgment of the factors mortgage borrowers have informed us are essential to them — we know this because we conducted a customer survey to find out.
Our roundup can help highlight how the characteristics of various mortgage lenders stack up against other top providers by combining research, expertise, and review.
Top 10 Mortgage Lenders UK
Here is the list of the 10 top mortgage lenders in UK
Lloyds banking group
In 2009, Lloyds and Halifax amalgamated. Halifax was the UK’s first building society and provided the first mortgage in 1853—a £121 loan with a 13-year term and 5% interest. With 17.4 million customers, they are the third-largest bank in the UK and the country’s top mortgage provider right now.
According to Lloyds, their mission is to “Help Britain Prosper” by fostering a more sustainable and inclusive future for both individuals and organizations and transforming finance into a positive force.
Nationwide
With 9.4 million UK clients now, the Co-Op Permanent, which was founded in 1884, changed its name to Nationwide in 1970.
Nationwide‘s culture is defined by a collection of values, principles, and actions known as PRIDE. P is for prioritizing members’ needs and their money, R represents taking on a challenge, I represents encouraging trust, D represents acting morally, and E stands for empowering one another.
Santander
They were introduced to the UK market in 2004 and, as of 2009, included Abbey National, Alliance & Leicester, and Bradford & Bingley.
There are currently 14 million UK clients. According to Santander, they want to see people and businesses succeed. They concentrate on the regions where their work may have the most effects and contribute to the inclusive and sustainable prosperity of more people and businesses.
Natwest Group
Founded in 1968 and amalgamated in 2000 with the Royal Bank of Scotland. the second-largest bank in the UK at the moment, serving 19 million clients.
According to NatWest, their mission is to support potential by fostering the success of individuals, families, and enterprises. They explain how this goal helps them to create long-term wealth, make investments for expansion, and contribute favorably to society.
Barclays
With roots reaching back to 1690, Barclays is the oldest bank in the UK. With 24 million customers, it is also the largest bank in the country.
Barclays’ five corporate values—Respect, Integrity, Service, Excellence, and Stewardship—serve as their moral compass. They claim that their culture is essential to their success as a bank and that it is most powerful when it unites them around a common goal and set of values.
HSBC
They began as Britain and Midland Bank in 1836 and changed its name to Hong Kong and Shanghai Banking Corporation in 1865. Currently, they have 14.5 million UK clients.
For their clients, our people, their investors, their communities, and the planet we share, HSBC claims that they are bringing together the people, ideas, and capital that nourish progress and growth. Visit their website: https://www.hsbc.com/
Yorkshire Building Society
Yorkshire Building Society, headquartered in Bradford, West Yorkshire, England, is the third largest building society in the United Kingdom. It belongs to the Building Societies Association.
The Yorkshire Building Society Group also includes the Chelsea Building Society and the Norwich and Peterborough Building Society, as well as Accord Mortgages and Egg’s savings business. The firm employs 3,300 people across the UK and serves 3 million customers.
Coventry Building Society
The Coventry Building Society is an English building society established in Coventry. With total assets of more than £56 billion as of December 31, 2022, it is one of the largest mortgage lenders in the United Kingdom.
It belongs to the Building Societies Association. There are 1.5 million savers and 350,000 borrower members in the society.
Royal Bank of Scotland
The Royal Bank of Scotland plc is Scotland’s largest retail and commercial bank. It is one of NatWest Group’s retail banking businesses, along with NatWest (in England and Wales) and Ulster Bank.
The Royal Bank of Scotland has over 700 branches, most of which are in Scotland, but there are also branches in several bigger towns and cities in England and Wales.
The bank is wholly distinct from the Bank of Scotland, another Edinburgh-based institution that predates the Royal Bank by 32 years. The Royal Bank of Scotland was founded to offer a banking institution with strong Hanoverian and Whig affiliations.
First Direct
For the majority of the last two decades, First Direct has led the way in customer satisfaction.
The online bank, which is part of the HSBC group, is always at the top of our customer satisfaction rankings – not just for mortgages, but also for bank accounts and credit cards.
It has gained the distinction of being the most trusted mortgage lender. A First Direct mortgage cannot be obtained through a broker. As the name implies, you must contact them directly.
How Much Money Will Lenders Provide You?
The amount you can borrow is determined by the loan-to-value (LTV) – the proportion of the value of the property you are purchasing or owning – as well as your ability to repay.
There are now relatively few lenders offering mortgages above 90% LTV, while certain solutions allow you to borrow more if you have aid from family or friends. They could, for example, set aside some of their funds as collateral for your loan or agree to a percentage charge on their own property.
The lower your LTV, the smaller your mortgage will be, thus the larger the deposit you can save, the better. This is also something to consider when considering how much to spend on a home or how much to borrow when looking for a remortgage arrangement.
Lenders used to have separate restrictions about how much of your income you may borrow (the loan-to-income ratio), but overall affordability is now the most significant criteria – lenders will look at your income and outgoings to determine what you can afford.
Since mortgage laws changed in 2014, borrowing more than four and a half times your individual or joint wage has become more challenging.
Requirements For Application for a Mortgage
Begin gathering all the necessary paperwork for your mortgage application. This could incorporate:
- utility invoices
- receipt of a P60 document from your employer
- evidence of benefits received
- your most recent pay stubs a passport or driver’s license as identification
- If you are self-employed, bank statements for the past three to six months and a statement of two to three years’ worth of accounts from an accountant are required.
- SA302 tax return form If you are self-employed or have income from multiple sources, you should look to include documentation with your tax return that verifies the income shown on your SA302, such as bank statements.
Be precise. Verify that the information on the application form corresponds with the papers you submit. For instance, if your salary is different from what is shown on your payslips, don’t round it up.
Give information about the estate agent, your solicitor, and the address of the home you intend to purchase. These are the essentials; some lenders can need additional documentation.
Remember that different lenders may have requirements regarding your income and expenses.
Find out what else you might need by asking your lender or an independent mortgage adviser.
Please be aware that printed copies of your current account and utility bill statements from the Internet may not be accepted. You’ll need hard copies or copies that have been certified by your utility company, bank, or solicitor.
What Causes Mortgage Applications to be Denied and What to Do Next
There are common reasons why a mortgage application can be denied;
Many credit applications
When you ask for credit, the lender will check your credit record to see if you are qualified.
Most searches are logged and appear on your credit report.
Applying for a lot of credit in a short period of time gives the impression that you have money troubles, so wait at least a year before applying for a mortgage.
Obtained payday loan
Any payday loan you’ve received in the last six years, even if you paid it off on time, will be displayed on your file. It could still work against you because lenders may believe you won’t be able to handle the financial burden of a mortgage.
The consequence of obtaining a payday loan varies per lender, and it does not necessarily imply you will be denied a mortgage.
Not corresponding with the lender’s profile
Lenders have varied underwriting requirements, and they consider a variety of factors when evaluating your mortgage application. It could be determined by a mix of age, income, employment status, loan-to-value ratio, and property location.
An independent mortgage adviser has market knowledge and is more likely to understand the underwriting criteria and suitability of various lenders.
Tiny deposit
If you have only been able to save a tiny deposit, your applications may be denied because you wish to borrow too much money.
If you have a little deposit of 5-10%, there are various mortgage deals accessible, but you must look for them.
You can try saving for a longer length of time to accumulate a larger deposit, or there are government programs to assist you if you just have a little deposit.
When you’ve lived less than 3 years in the UK
If you’ve been in the UK for less than three years, most lenders will refuse to lend to you, but not all.
You must present your job contract as well as a visa proving your right to reside and work in the UK.
Error from Administration
Lenders are not without flaws. Many of them enter the information from your application into a computer, therefore you may have failed due to a mistake or error on your credit report. A lender is unlikely to provide you with a precise reason why you failed a credit application unless it is related to your credit history.
If this occurs, the lender should provide you with the name and contact information of the credit reference agency that was used.
If one is self-employed or a contract worker
You must present tax returns and business records for the last two to three years to demonstrate that you have a consistent income.
You may also be required to demonstrate that you have future employment lined up – however, the choice may differ from lender to lender
FAQs
What type of mortgage is most popular in the UK?
Repayment Mortgage.
Repayment mortgages are the most prevalent sort of mortgage, and regardless of their fancy marketing titles and phrases, they serve as the foundation for the great majority of other mortgages on the market.
In the UK, can a foreigner obtain a mortgage?
If you’re self-employed and a non-UK citizen, you can obtain a mortgage. Tell your broker right away because any lender will want to see as much documentation of your income as possible.
Is a mortgage from a bank in the UK preferable to one from a broker?
Due to lower overhead costs and laxer lending standards, mortgage brokers are frequently less expensive than banks. Additionally, a mortgage broker will be far more knowledgeable about your needs and be able to locate the ideal mortgage for you.
In the UK, how long are mortgages?
25 years.
Anything longer than this is considered lengthy in the UK, where a mortgage term’s typical limit is 25 years. Many lenders now provide mortgages with terms longer than 25 years; the longest commonly available is 40 years.
Can I obtain a mortgage in the UK without a job?
You won’t be able to obtain a mortgage if you can’t demonstrate that you and any co-buyers have enough income. As a result, it may be challenging to obtain a mortgage without work, however other sources of income, such as benefits, may be helpful.
Where to go once the mortgage application is declined
The mortgages on offer will be known to a professional mortgage broker or independent financial consultant who specializes in mortgages.
They will be aware of what different lenders look for before providing someone a mortgage and will communicate with the lender on your behalf.
Conclusion
This article was designed specifically to assist you in your search for the top 10 mortgage lenders in the UK to make your search less complicated.
