Fixed or tracker mortgage, which is right for you?

Every mortgage is either fixed or variable, and almost every variable deal you will be offered is a tracker. The choice decides whether your payment stays the same for years or moves with the Bank of England, and it matters more than most people expect. This guide sets out what each one does and how to decide between them.

What a fixed rate does

A fixed rate holds your interest rate, and therefore your monthly payment, for an agreed period. Two and five years are the most common, with three and ten available from some lenders. Whatever happens to Bank Rate in that time, your payment does not change.

When the fixed period ends, the mortgage moves to the lender’s standard variable rate, which is nearly always much higher. The usual plan is to arrange a new deal before that happens, either with the same lender as a product transfer or with a different one as a remortgage.

The price of certainty is flexibility. Leaving a fixed deal early means paying an early repayment charge, typically between one and five per cent of the balance, which can run to thousands of pounds. Most fixed deals let you overpay up to ten per cent of the balance each year without a charge, and many can be moved to a new property if you sell, a process called porting, but the lender has to approve the new loan on the day.

What a tracker does

A tracker follows Bank Rate at a set margin above it. A deal described as Bank Rate plus one per cent would charge 4.75 per cent while Bank Rate is 3.75 per cent, which is where it stands at the time of writing in September 2026, and would change within a month or so of the Bank moving it.

That is the whole point and the whole risk. If rates fall, your payment falls without you doing anything. If they rise, so does your payment, and there is no ceiling unless the deal has one. Some trackers carry a collar, a floor below which the rate will not drop, so read for that.

Trackers often have lower early repayment charges than fixed deals, and some have none at all. That makes them useful for anyone who expects to sell, move or receive a lump sum within a couple of years and does not want to be locked in.

The rate nobody should sit on

The standard variable rate, or SVR, is what a lender charges when no deal is in place. It is set by the lender, not by Bank Rate, and it is almost always the most expensive option on the menu. Sitting on the SVR because a fixed deal ended and nobody arranged the next one is one of the most common and most avoidable ways to overpay for a mortgage. Diarise the end date of any deal and start looking six months before it.

A discounted variable rate is a cousin of the tracker. It offers a discount off the lender’s SVR rather than a margin over Bank Rate, so the lender can change it whenever it likes. Cheap at the start, less predictable after.

Two years or five?

Within fixed deals, the length is the next decision. A two-year fix keeps your options open and suits people whose circumstances are about to change. A five-year fix buys certainty over a longer stretch and saves the cost and effort of remortgaging in between. Ten-year fixes exist and suit people who are settled and value never thinking about it again, but the early repayment charges are long-lived.

The rates on offer for each length move around with the market’s view of where Bank Rate is going. Sometimes five-year money is cheaper than two-year money, sometimes the other way round, so compare them on the day rather than assuming.

Questions that settle it

Ask yourself four things. How would a rise of £150 a month affect the household budget, and for how long could you absorb it? Are you likely to move, sell or receive a lump sum in the next two to three years? Do you sleep better knowing the number, or do you resent paying for certainty you might not need? And how much time do you want to spend arranging deals?

Answer honestly and the choice usually makes itself. People who would be stretched by a rise lean towards a fix. People with flexible finances and a short horizon lean towards a tracker. The calculator will show you the payment at your chosen rate and at one, two and three points higher, which is a useful way to test the first question.

Fees and the small print

Whichever you choose, look at the product fee as well as the rate. A low rate with a £999 fee can cost more over two years than a slightly higher rate with no fee, particularly on a smaller loan. Check the early repayment charges, the overpayment allowance, and whether the deal can be ported. Our fee for arranging the mortgage is separate and is explained before you commit.

Next steps

If your current deal ends within the next six months, or you are buying and need to decide, ask us for a quote. An adviser will compare fixed and tracker deals across the lenders we work with and explain what each would mean for your payment.

This guide is general information, not advice. It describes how things usually work and cannot take your circumstances into account. For a recommendation, speak to an adviser.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our mortgage broker fee starts from £495. The exact fee depends on your circumstances and is agreed with you before you commit to anything.