Published: October 4, 2025

Fixed vs Variable Mortgages Explained

By Donna Puncher CeMAP

Introduction

When choosing a mortgage, one of the most important decisions you’ll make is whether to go for a fixed or variable rate.
Both have advantages and drawbacks, and the right choice depends on your personal circumstances, budget, and outlook on interest rates.

Understanding how these products work helps you pick a mortgage that fits your needs — not just now, but for the years ahead.

1. Fixed Rate Mortgages

A fixed rate mortgage guarantees your interest rate for a set period, usually between two and five years.
That means your monthly payments stay the same, regardless of what happens to the Bank of England base rate.

Advantages

• Predictable monthly payments — ideal for budgeting.
• Protection against future rate rises.
• Peace of mind if your income is steady or you prefer financial certainty.

Considerations

• You may pay slightly more than variable deals when rates are stable.
• Most fixed mortgages have Early Repayment Charges (ERCs) if you exit early.
• At the end of your fixed term, your lender will usually move you onto a Standard Variable Rate (SVR) — which is often higher.

2. Variable Rate Mortgages

Variable mortgages move in line with the lender’s own rate or the Bank of England base rate.
This means your payments can go up or down during the term.

Main Types of Variable Rate Mortgage

• Tracker: Directly linked to the Bank of England base rate, plus a set margin.
• Discount: Follows the lender’s SVR, usually with a small discount for a limited time.
• Standard Variable Rate (SVR): The lender’s own default rate, often less competitive.

Advantages

• Potentially lower rates when interest levels fall.
• Greater flexibility — often fewer ERCs.
• Some borrowers overpay more easily to clear balances faster.

Considerations

• Monthly repayments can fluctuate — less predictable.
• Rising base rates can quickly increase costs.
• Harder to budget if your income varies month to month.

3. Which Mortgage Type is Best for You?

There’s no one-size-fits-all answer.

You might prefer:

• Fixed: if you value stability and want predictable budgeting.
• Variable: if you can tolerate change and hope to benefit from falling rates.

A good approach is to consider your risk tolerance, future plans, and how much flexibility you need.

4. Switching Between Types

Many borrowers switch between fixed and variable rates over time — for example, fixing when rates are low, then moving to a tracker later.
This can form part of a long-term mortgage strategy to balance stability and savings potential.

Summary

The key to choosing between fixed and variable mortgages is understanding how they’ll affect your monthly payments and overall costs.
A professional mortgage adviser can help you compare products and choose the right fit based on your income, goals, and risk profile.

How much can I afford?

You may also like our LTV guide or to find out what the housing market is doing in Southend On Sea today