Finance glossary
Fixed Rate
Also known as: Fixed-rate mortgage
In simple terms
A fixed-rate mortgage locks your interest rate for a set period — often two or five years — so your monthly payment stays exactly the same for that time, whatever happens to interest rates.
On this page
What does fixed rate mean?
A fixed rate is an interest rate that is guaranteed not to change for an agreed period, usually two, three, five or ten years. During that period your monthly mortgage payment stays the same, giving you certainty over your biggest regular outgoing.
When the fixed period ends, you normally move onto the lender’s standard variable rate (SVR) unless you remortgage or switch to a new deal — so a fix is a fixed window, not the whole mortgage term.
How a fixed rate works
You agree the rate at the start and it is held for the fixed period regardless of what the Bank of England base rate does. If rates rise, you are protected; if rates fall, you keep paying the higher fixed rate you agreed.
Most fixed deals carry an early repayment charge if you leave or overpay beyond an allowance during the fixed period. Toward the end, it is usually worth lining up a new deal so you do not drift onto the more expensive SVR.
How could this affect me?
Fixing suits people who value certainty and want to budget with confidence — you know exactly what you will pay each month. A longer fix gives more certainty but ties you in for longer and usually starts at a slightly higher rate.
The trade-off is flexibility: if rates fall you cannot benefit without paying to exit, and leaving early can be expensive. Weigh the peace of mind against the cost of being locked in.
Things to watch out for
- When the fix ends you usually roll onto the lender’s SVR, which is often much higher — diarise the end date.
- Early repayment charges can be steep if you leave or overpay beyond the yearly allowance during the fix.
- A longer fix means more certainty but a longer tie-in if your circumstances change.
- You do not benefit if rates fall during the fixed period.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Fixed, variable, tracker and discount mortgages explained (opens in a new tab). Accessed 22 Aug 2026.
- Bank of England, Bank Rate and how it affects mortgages (opens in a new tab). Accessed 22 Aug 2026.