Fixed vs variable rate mortgages

General guidance, not a personal recommendation. Lender criteria, insurance terms and costs depend on the product and your circumstances. Numerical examples are illustrations unless expressly identified as an individual quote. Check current terms with your adviser and tax or legal points with the relevant specialist.

When you take a mortgage, the biggest single decision (after how much to borrow) is whether to lock your rate, a fixed-rate mortgage, or let it move with the market, a tracker or SVR. The vast majority of UK mortgages are fixed. But "most people pick it" doesn't make it automatically right for you.

Below we break down the options, when each makes sense, and how we decide with clients in Essex. None of this is a recommendation for your specific case, that needs a full affordability and circumstances review, but it should help you walk into that conversation knowing what matters.

Know your options

2-year fix

Rate locked for 24 months. Early repayment charges (ERCs) apply if you leave before the 2 years are up, typically 1-2% of loan. Good for: short-term certainty, expecting rates to fall, planning to move within 2-3 years.

5-year fix

Rate locked for 60 months, so you get five years of payment certainty. How it prices against the same lender's 2-year moves with the market, sometimes higher, sometimes lower. ERCs typically 5% of loan, tapering by year. A common choice for households that want a settled budget. Good for: settled buyers, family budgets, rate-rise protection.

10-year fix

Rate locked for a decade. Rare but available, and normally priced above the same lender's 5-year. ERCs heavy (5-7%). Locks you in for a long time, circumstances can change. Good for: genuinely long-term holders, older borrowers, rate-fall-proof positions.

Tracker / variable

Rate moves with the Bank of England Base Rate plus a margin (e.g. BoE + 0.75%). Usually no or low ERCs so you can remortgage any time. Payment changes when BoE changes. Good for: rate-fall bets, flexibility, large loans where ERC on a fix would be painful.

How we pick with clients

There's no universal right answer, but a few practical questions usually narrow it down:

• How long will you own this property? Moving in 2 years = 2-year fix or tracker. Forever home = 5 or 10-year fix.
• How sensitive is your budget to rate moves? Tight budget = fix. Plenty of headroom = more options.
• What's your view on rates? Fix if you think rates will rise. Tracker if you think they'll fall, but be honest about your track record predicting rates.
• Any life changes coming? Baby, new job, moving city, separating, all argue for flexibility over a long fix.
• What about early repayment? Expect to overpay significantly or redeem early? Check ERC levels carefully; sometimes a slightly higher-rate product with no ERC is better value.

In the current market (April 2026), the 5-year fix is the most common choice we place. The gap vs a 2-year fix is usually small and 5 years of payment certainty is worth it for most families.