Fixed vs Variable Mortgage: Which Is Right for You?

Fixed Rate Mortgages

Your interest rate stays the same for a set period (typically 2 or 5 years). Monthly payments are predictable. When the fixed period ends, you move to the lender's Standard Variable Rate (SVR) unless you remortgage.

Pros: Payment certainty, protection from rate rises, easier to budget. Cons: Miss out if rates fall, early repayment charges if you leave early, usually higher initial rate than trackers.

Variable Rate Mortgages

Tracker mortgages follow the Bank of England base rate plus a fixed margin (e.g., base rate + 0.5%). Your payments move with rate changes.

Standard Variable Rate (SVR) is set by your lender and can change at any time. Typically the most expensive option — avoid staying on it.

Discount mortgages offer a reduction off the lender's SVR for a set period.

Which Should You Choose?

Choose fixed if: You want certainty, rates are expected to rise, you have a tight budget with no room for payment increases, or you sleep better knowing exactly what you'll pay.

Choose variable if: Rates are expected to fall, you have financial flexibility to absorb payment increases, you want the lowest possible rate right now, or you might need to move house soon (trackers often have no early repayment charges).

2-Year vs 5-Year Fixed

2-year fixes are usually cheaper but you remortgage more often (with fees each time). 5-year fixes cost slightly more but offer longer stability. In an uncertain rate environment, 5-year fixes provide better value for most people.