Fixed vs tracker mortgage and how to choose between them

Fixed vs tracker mortgage in a nutshell

The choice comes down to one question. Would you rather know exactly what you'll pay each month, or take the chance of paying less in exchange for the risk of paying more?

A fixed-rate mortgage gives you certainty. A tracker gives you flexibility. Neither is automatically the cheaper option, and the right one depends as much on your budget and your plans as on where interest rates are heading.

What is a fixed-rate mortgage?

With a fixed-rate mortgage, your interest rate stays the same for the length of the deal, usually two, three, five or ten years. Your monthly payment doesn't change, whatever happens to the Bank of England base rate.

That's the big appeal. You can budget with confidence, and if rates rise, you're protected until the deal ends. The trade-off is that if rates fall, you won't benefit, and leaving early usually means paying an early repayment charge, which can run into thousands of pounds.

What is a tracker mortgage?

A tracker mortgage follows the Bank of England base rate, plus a set margin. If base rate is 3.75% and your tracker is base rate plus 0.75%, you'd pay 4.5%. When base rate goes up or down, your rate moves with it, usually from the following month.

The appeal is flexibility. If rates fall, your payments drop straight away. Many trackers also come with low or no early repayment charges, which helps if you think you might move, remortgage or overpay. The risk is the flip side. If base rate rises, so do your payments, and there's no cap on how far they can go.

Check the small print for a "collar", which is a minimum rate your mortgage won't fall below even if base rate drops further. MoneyHelper also suggests making sure your lender can't put your rate up when the base rate hasn't moved.

What about a standard variable rate?

The standard variable rate, or SVR, is the rate your lender moves you onto when your fixed or tracker deal ends. Unlike a tracker, it isn't tied to base rate. The lender sets it and can change it at any time.

SVRs are almost always much higher than the best deals. According to Moneyfacts, the average SVR was 7.13% in October 2026, more than a full percentage point above the average fixed rate. That's why it pays to look for a new deal before your current one runs out. Our guide on when to remortgage explains the timing.

A discounted variable rate mortgage is a cousin of the SVR. It gives you a set discount off the lender's SVR for a fixed period, but because the SVR can move at any time, so can your rate.

Current mortgage rates

Rates change constantly, so treat these as a snapshot rather than a quote. For today's current fixed mortgage rates, check with a broker or lender before you apply.

Source: Base rate from Bank of England (held on 17 September 2026). Average rates from Moneyfacts, October 2026.

The interesting thing about the market right now is the gap between fixed rates and base rate. The Bank of England held base rate at 3.75% in September 2026, but average fixed rates have climbed to around 6%. That's because fixed deals are priced on what lenders expect rates to do over the next few years, not on today's base rate, and those expectations have risen. Moneyfacts found that the number of fixed deals priced below 5% fell from around 1,500 at the start of September to just nine a month later, while hundreds of variable deals were still available below 5%.

In other words, trackers currently look cheaper on day one. Whether they stay cheaper depends on what base rate does next.

How a rate change affects your payments

It's easier to weigh up the risk when you can see it in pounds. Here's what a £200,000 repayment mortgage over 25 years would cost each month at different rates.

Based on a £200,000 repayment mortgage over 25 years. Figures rounded to the nearest pound.

So a tracker starting at 4.5% saves roughly £170 a month against a 5.96% fix. But if base rate rose by 1.5 percentage points over the deal, the tracker would end up costing about the same, and anything beyond that would leave you paying more.

Which should you choose?

There's no right answer for everyone when you're deciding between a tracker or fixed mortgage, but a few questions usually point the way.

A fixed rate tends to suit you if you're on a tight budget and couldn't absorb a jump in payments, if you're a first-time buyer who wants to know exactly what's going out each month, or if you'd simply sleep better knowing your payment won't change.

A tracker tends to suit you if you've got some breathing room in your budget, if you think base rate is more likely to fall than rise, or if you want the freedom to overpay or move without big early repayment charges.

Some lenders also offer trackers that let you switch to a fixed rate later without a penalty, which can be a useful middle ground if you're undecided. And whichever you choose, a mortgage broker can compare the whole market and tell you what you're likely to be offered. Our guide to getting a mortgage agreement in principle is a good first step.

Don't forget the bigger picture

The rate is only part of the cost. Arrangement fees, early repayment charges and how much deposit you've got all affect what a mortgage really costs you. A bigger deposit usually unlocks better rates on both fixes and trackers, and our guide to 95% mortgages explains what to expect if you're borrowing at the top end.

Whatever you go for, set a reminder for a few months before your deal ends so you're never left drifting onto the SVR.