The short answer
A fixed rate stays the same for a set period, usually 2, 5, or 10 years, regardless of what happens to interest rates in the wider economy. A variable rate can move up or down during your deal, tracking either the Bank of England base rate directly (a tracker) or set at the lender's discretion (standard variable rate, or SVR). Neither is universally "better" — they trade off predictability against the possibility of paying less.
Model both scenarios
Use the mortgage calculator to see your monthly payment at different rates, so you can compare what a fixed offer and a plausible variable rate would each cost you.
Open the mortgage calculator →The three main types, explained
| Type | How it works | Best suited to |
|---|---|---|
| Fixed rate | Rate locked for the deal period (typically 2–10 years), then reverts to SVR unless you remortgage | Buyers who want a predictable monthly payment for budgeting |
| Tracker | Moves directly with the Bank of England base rate, plus a fixed margin set by the lender | Buyers comfortable with payments changing, often betting rates will fall or stay low |
| Standard variable rate (SVR) | The lender's own default rate, changeable at their discretion, usually the most expensive option | Nobody, by design — it's what you land on if you don't actively choose a deal |
Worked example: what a rate move actually costs
Say you're borrowing £250,000 over 25 years. Compare a 5-year fixed at 4.5% against a tracker starting at 4.0% that rises to 5.0% after 12 months.
5-year fixed at 4.5%
Tracker: year 1 at 4.0%, then rising to 5.0%
In this scenario, the tracker starts cheaper but ends up more expensive if rates rise as shown — a swing of over £140 a month once the increase lands. The fixed rate buyer pays more upfront but never has to budget for that kind of jump. Neither outcome is guaranteed; rates could just as easily have fallen instead, which would have made the tracker the better deal throughout.
What actually determines which is right for you
- How tight is your budget? If a rate rise of even 1–2 percentage points would seriously strain your finances, the certainty of a fixed rate is usually worth more than the chance of saving money on a variable one.
- What's your view on where rates are heading? Nobody can predict this reliably, but if you have a strong reason to expect rates to fall, a tracker lets you benefit immediately rather than waiting out a fixed term.
- How long do you plan to stay in the property or deal? Fixed deals often carry early repayment charges if you leave before the term ends — relevant if you might move or remortgage sooner than expected.
- Do you want to actively manage your mortgage, or set and forget it? A fixed rate is the closer thing to "set and forget"; a variable rate rewards paying attention and being ready to switch if things change.
Don't forget what happens at the end of the deal
Whichever you choose, the deal period ends eventually — and if you don't arrange a new one, you land on the lender's SVR, which is almost always higher than either a competitive fixed or tracker rate. Most people remortgage a few months before their current deal ends specifically to avoid this — and if you're simply moving to a new deal with your existing lender (rather than switching provider), this is usually a quick process, not a full new mortgage application. See our remortgaging guide for what that process involves and whether it triggers any tax.
Frequently asked questions
What happens when my fixed deal ends?
Unless you arrange a new deal, you'll automatically move onto your lender's standard variable rate (SVR), which is almost always higher than the deal you were on. Most people remortgage or switch to a new deal shortly before their fixed term ends to avoid this.
Can I switch from a variable rate to a fixed rate mid-term?
Often yes, though it depends on your specific mortgage and lender. Some variable deals allow switching without penalty; others may have early repayment charges. Check your mortgage offer document or ask your lender directly before assuming you can switch freely.
Is a fixed rate always the safer choice?
It's the more predictable choice, not necessarily the cheaper one. If rates fall after you fix, you keep paying the higher fixed rate, since fixed deals typically don't adjust downward with the market. Safety here means budgeting certainty, not necessarily the lowest total cost.
Do longer fixed terms, like 10 years, cost more than shorter ones?
Not automatically, but they often come with a rate premium since the lender is taking on more interest rate risk over a longer period. Longer fixes also tend to carry higher early repayment charges if you need to leave the deal before it ends, which is worth weighing against the certainty they offer.
This guide is for general information and doesn't constitute financial advice. Illustrative rates and payment figures are for demonstration only — always check current products and get a personalised illustration from a mortgage broker or lender before deciding.