Should I choose a fixed or variable rate mortgage?

There’s no one-size-fits-all answer whether someone should take a fixed or variable rate mortgage. In a frequently changing mortgage market, it can be an especially tough time to know which option is best. However, since some fixed rates have started to reduce since the Autumn Statement, it is a good time to review whether now may be the time to lock into a fixed rate mortgage.

In this article, we analyse the benefits of both variable and fixed rate mortgages and why they may be suitable for your circumstances.

If you’re coming to the end of your current mortgage deal or taking out a new mortgage, our experienced consultants can help you understand your options, considering your individual circumstances, deposit, monthly mortgage repayments, and help you make informed financial decisions. You can speak to one of our mortgage advisors on an obligation-free basis by calling us on +44 (0)20 7317 2820 or alternatively by emailing us at

In this article we discuss:

  • What has happened to fixed rates recently?
  • The benefits and disadvantages of fixed and variable rate mortgages
  • Should I lock in a fixed rate mortgage now?

What has happened to fixed rates recently?

After many mortgage rates jumped to comfortably over 5% (most lenders were 6%) following the mini-budget, considering a product which affords flexibility, such as a tracker or discounted variable rate, continued to be popular for those at the end of their product term or on a lender’s Standard Variable Rate, particularly those with no early repayment charges.

However, the lending environment is frequently changing and since the mini-budget, many lenders have been slowly reducing their fixed rates and re-introduced mortgage products. We have now started to see rates below 5%, for both a 2- and 5-year fixed mortgage products, enter the market.

The benefits and disadvantages of fixed and variable rate mortgages

The discussion around fixed and variable rate mortgages differ for the residential and buy-to-let (BTL) market.

Residential mortgages

The main benefit of a fixed rate mortgage is the certainty. The monthly mortgage payments will always be the same for the length of the product, regardless of interest rate movements, however, you will usually have to pay an early repayment charge (ERC) if you leave the product early.

Variable rates fluctuate depending on the wider economic and financial market. While this does make this the riskier option, a borrower may be able to reduce their total mortgage payments if the rate remains low for a substantial period of time compared to a fixed rate mortgage.

Buy-to-let mortgages

Choosing a fixed or variable rate for your BTL mortgage is more complex than just expectation of rates, security and flexibility required. Lenders carry out a stress test for fixed and variable rates to work out the maximum borrowing. These stress rates vary depending on which product you select, with a 5-year fixed typically being most favourable. If you are a landlord or would like to know more about how much you can borrow, our consultants can help you calculate the numbers while also considering your individual circumstances.


Should I lock into a fixed rate mortgage now?

Choosing whether to fix your mortgage right now is a personal decision and varies depending on an individual’s circumstances. Tracker and variable rates do appear quite competitive right now as they have not taken into account future base rate rises whereas fixed rates consider future anticipated increases. Greater than expected increases to the base rate could push mortgage rates significantly higher, making locking into a fixed rate deal right now all the more attractive. On the other hand, we may find that inflation settles down over the next two years and lenders reduce fixed rates further.

Other factors to consider are risk appetite and ability to react to fluctuations in monthly repayments. Many individuals prefer the stability and certainty of a fixed rate mortgage, whereas others are able to accept the risk of fluctuating mortgage repayments.

The best way to be absolutely sure that you have accounted for all of the operative factors when deciding on your mortgage is to speak to a qualified mortgage consultant. They will take the time to understand your unique circumstances, and will use their up-to-the-minute, expert understanding of the mortgage market to provide you with an informed recommendation of the type of product that is best suited to you.

If you would like to discuss your mortgage-options with a qualified professional, you can speak to one of our mortgage advisors on an obligation-free basis by calling us on +44 (0)20 7317 2820 or alternatively by emailing us at

Please remember that your home may be repossessed if you do not keep up repayments on your mortgage. 

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