# Fixed vs Variable Rates

> The difference between fixed, tracker and standard variable rate mortgages, and how to weigh up certainty against flexibility.

Canonical page: [/mortgages/fixed-vs-variable-rates](/mortgages/fixed-vs-variable-rates/) · Last reviewed: 2026-08-22

One of the biggest choices when taking a mortgage is whether to fix your interest rate or take a variable one. Each has trade-offs between certainty and flexibility.

## Key information

- A fixed rate keeps your payments the same for a set period
- Variable rates can rise or fall, so your payments can change
- Trackers follow the Bank of England base rate by a set margin
- When a deal ends you usually move onto the lender’s standard variable rate

## Fixed-rate mortgages

With a fixed-rate mortgage, your interest rate — and therefore your monthly payment — stays the same for an agreed period, commonly two, three or five years. This gives certainty and makes budgeting easier, protecting you if rates rise during the deal.

The trade-off is that you will not benefit if rates fall, and fixed deals usually carry an [early repayment charge](/mortgages/mortgage-fees#early-repayment-charges) if you leave before the term ends. When the fixed period finishes, you typically move onto the lender’s standard variable rate unless you [switch to a new deal](/mortgages/remortgaging).

## Variable-rate mortgages

Variable-rate mortgages can change over time. A tracker follows an external rate — usually the [Bank of England base rate](/banking-savings/interest-rates) — plus a set margin, so your payment moves up or down when the base rate changes. A discount deal gives a reduction off the lender’s standard variable rate for a period.

- Tracker — moves directly with the Bank of England base rate by a fixed margin
- Discount — a set amount below the lender’s standard variable rate for a period
- Standard variable rate (SVR) — the lender’s default rate, which it can change largely at its discretion and is often higher

## Choosing between them

If certainty matters most and you want to know exactly what you will pay, a fixed rate may suit you. If you can absorb changes in your payments and think rates may fall, a variable rate could cost less — but there is no guarantee. Because this depends heavily on your circumstances, many people take regulated advice before deciding.

## Your rights

- Your lender must set out the interest rate, how long any deal lasts, and what happens when it ends, before you commit.
- For variable rates, the lender must give you appropriate notice of changes to your payments.
- If you feel a rate or a change was applied unfairly, you can complain and escalate to the Financial Ombudsman Service.

## Official sources

- [Bank of England — the base rate](https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate)
- [MoneyHelper — Mortgages](https://www.moneyhelper.org.uk/en/homes/buying-a-home)

## Related

- [Remortgaging](/mortgages/remortgaging/)
- [Mortgage Fees](/mortgages/mortgage-fees/)
- [Interest Rates Explained](/banking-savings/interest-rates/)
- [Mortgage Calculator](/tools-calculators/mortgage-calculator/)

## Sources

- MoneyHelper — [Types of mortgage](https://www.moneyhelper.org.uk/en/homes/buying-a-home/mortgage-types) (accessed 2026-08-22)
- Bank of England — [Bank Rate](https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate) (accessed 2026-08-22)