One of the first choices when picking a mortgage is between a fixed rate and a variable one. Each suits different priorities and circumstances. This guide explains fixed versus variable rate mortgages: how each works, their pros and cons, the current rate context, and how to decide which is right for you.
The two broad types
Mortgage rates come in two broad types: fixed, where the rate stays the same for a set period, and variable, where the rate can change. Variable rates include trackers, discounts and the standard variable rate. The core difference is certainty versus flexibility: a fixed rate locks in your payments, while a variable rate can rise or fall. Understanding this distinction is the starting point for choosing a deal.
How a fixed rate works
With a fixed-rate mortgage, your interest rate, and so your monthly payment, stays the same for a set period, commonly two or five years. Whatever happens to interest rates in that time, your rate does not change, giving certainty and easy budgeting. When the fixed period ends, you revert to the lender's standard variable rate unless you remortgage, so most people switch to a new deal at that point.
How a variable rate works
A variable rate can change during your deal. A tracker follows the Bank of England base rate plus a margin, a discount sits below the lender's standard variable rate, and the standard variable rate itself is set by the lender, as our guides to trackers and the standard variable rate explain. With a variable rate, your payments can rise or fall as rates move, bringing potential savings but also uncertainty.
The pros and cons of fixing
Fixing gives certainty: your payments are protected from rate rises, making budgeting easy, which many people value. The trade-offs are that you will not benefit if rates fall, and fixed deals usually carry early repayment charges if you leave early, as our guide to early repayment charges explains. So fixing buys peace of mind, at the cost of flexibility and any benefit from falling rates.
The pros and cons of variable rates
A variable rate can save money if rates fall, and some trackers have low or no early repayment charges, giving flexibility. The downside is uncertainty: if rates rise, your payments increase, which can strain a tight budget. Variable rates suit those who can absorb potential rises and want flexibility or to benefit from falling rates, but they carry more risk than the certainty of a fix.
The current rate context
In mid-2026, the Bank of England base rate is 3.75%, average fixed rates are roughly in the high-5% range, with the best deals lower depending on your loan-to-value, while the standard variable rate averages around 7%. Rates can change, and the outlook is uncertain. Because the picture moves, comparing current deals when you come to choose, rather than relying on past figures, is essential.
How to decide
Choosing between fixed and variable depends on your priorities: certainty and protection from rises point to a fix, while flexibility and the chance to benefit from falls point to a variable rate, if you can absorb increases. Your budget, attitude to risk, and how long you want to fix all matter, as our guide to how long to fix explains. There is no single right answer.
Two-year versus five-year fixes
A common decision within fixing is how long to fix for, typically two or five years. A shorter fix lets you review sooner and is less of a commitment, while a longer fix gives certainty for longer but ties you in, with early repayment charges for the whole period, as our guide to how long to fix explains. The right length depends on your plans and view on rates.
Why fixes are popular
Fixed rates are the most popular choice for many borrowers because the certainty of knowing exactly what you will pay each month makes budgeting easy and protects against rate rises. In uncertain times, this peace of mind is valuable. The trade-off, no benefit if rates fall and early repayment charges, is one many accept for the security a fix provides, which is why fixes dominate the market.
Capped rates: a middle ground
A capped rate is a variable rate with an upper limit, so it can fall but cannot rise above the cap, offering some of the benefit of a variable rate with protection against large rises, as our guide to capped and flexible mortgages explains. Capped deals are less common but can appeal to those wanting a middle ground between the certainty of a fix and the flexibility of a variable rate.
How rates are priced
Fixed rates are largely priced from swap rates, the cost to lenders of funding fixed lending, which is why fixes can move even when the base rate is unchanged. Variable rates like trackers follow the Bank of England base rate, as our guide to the base rate and your mortgage explains. Understanding what drives each helps explain why fixed and variable rates do not always move together.
Switching when your deal ends
Whether you choose fixed or variable, your deal will eventually end and revert to the standard variable rate unless you remortgage, as our guide to the standard variable rate explains. So with both, you will normally switch to a new deal when the current one ends. Planning to remortgage at that point, rather than drifting onto the standard variable rate, applies whichever type you choose.
Your view on where rates are heading
Part of the choice involves your view on where rates might go, though no one can predict this with certainty. If you think rates will rise, fixing now locks in today's rate; if you think they will fall, a variable rate or shorter fix lets you benefit. Because the future is uncertain, many people fix simply for the security, accepting they might miss out if rates fall, rather than trying to time the market.
Mixing certainty and flexibility
You do not always have to choose one or the other outright. Some borrowers split their mortgage, fixing part and keeping part variable, or choose a shorter fix to revisit the decision sooner. These approaches blend certainty and flexibility. Thinking about how much certainty you need, and over what period, helps you find a balance that suits your budget and peace of mind rather than an all-or-nothing choice.
Whichever you lean towards, the most important habit is to review your mortgage whenever your deal ends and switch to a competitive new one, since drifting onto the standard variable rate is the one outcome that reliably costs more than either a fix or a variable rate would.
In short
Fixed-rate mortgages keep your rate and payments the same for a set period, giving certainty but no benefit if rates fall and usually early repayment charges. Variable rates, including trackers and discounts, can rise or fall, offering potential savings and sometimes flexibility but less certainty. In mid-2026 the base rate is 3.75% with fixes mostly in the high-5% range. The right choice depends on your priorities, budget and risk appetite.
Where to get help and next steps
Read our guides to how a mortgage works, tracker mortgages, and how long to fix. This is general information, not mortgage or financial advice.