In this article, we compare fixed-rate and tracker mortgages to work out which one is best for your particular circumstances. We look at the pros and cons of each mortgage type and the key facts that you should consider when choosing between a fixed-rate and variable-rate tracker mortgage.
To compare fixed-rate and tracker mortgage deals use our Mortgage Rate Comparison Tool and read our article for the best mortgage rates in the UK which we regularly update with the best mortgage deals.
Mortgage experts* can also provide excellent guidance to determine which mortgage option will suit you best and could save you money over the term of your mortgage loan.
What is a fixed-rate mortgage?
A fixed-rate mortgage is where the mortgage interest rate charged on your mortgage balance is fixed from the outset and does not change for the duration of the fixed deal period. This means that your monthly repayments will be the same amount every month until your deal period ends. This can help with budgeting if your affordability is less flexible.
You can read more about this mortgage type in our article, "What is a fixed-rate mortgage? Everything you need to know".
What is a variable-rate tracker mortgage?
A tracker mortgage is a type of variable-rate mortgage where the mortgage interest rate charged on what you borrow tracks the Bank of England (BoE) base rate of interest. This means that every time the Bank of England changes the base rate, the overall amount of interest that you pay will change, and you may see an increase or decrease in your monthly mortgage payments. The BoE reviews the base rate around every 6 weeks when the Monetary Policy Committee (MPC) decide if it will be increased, reduced or kept the same. So, although your interest rate may not change at every review, there is the possibility that it could and this would mean possible changes to your monthly mortgage payment. Your lender will charge you a set percentage in addition to the base rate. So, the overall amount of interest that you pay is the fixed amount set by your lender plus the Bank of England base rate.
In order to minimise how much your interest payments could change, mortgage lenders may include a cap or a collar. A cap will mean that your tracker mortgage interest rate cannot exceed the capped percentage and a collar prevents your interest rate from dipping below the collared level.
You can read more about this type of mortgage in our article, "What is a tracker mortgage and is it right for you?".
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Fixed-rate mortgages vs variable-rate tracker mortgages
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Should I get a fixed-rate mortgage or a variable-rate tracker mortgage?
Start by asking yourself some key questions to work out your preferences and limitations. The first thing to consider is whether you will be able to afford an increase in your mortgage payment if the Bank of England base rate increases.
Should I get a fixed-rate mortgage?
If you prefer to know what you have to pay for your mortgage each month and do not like the prospect of an unexpected increase in your outgoings, a fixed-rate mortgage is likely to be a good idea. Fixed rates can provide certainty if you are concerned about changes to your affordability or are worried about rising interest rates.
Should I get a variable-rate tracker mortgage?
To work out if a tracker mortgage is suitable for you, you need to weigh up the pros and cons of an interest rate and mortgage payment that could fluctuate. A tracker mortgage can be a good idea if you have room within your budget for your mortgage payment to fluctuate from time to time and you want to benefit from possible base rate reductions that could lower the interest you pay.
If you are wondering if your tracker mortgage could go up, you should start by understanding how interest rates are likely to change before you decide whether a tracker mortgage is a good idea. You will find information about how interest rates are likely to change in our article, "When will interest rates rise (or be cut)? – Latest predictions".
Tracker vs Fixed Rate - cost comparison on a 2-year deal
| Current tracker rate | Assumed tracker rate Feb 2025^ | Assumed tracker rate Feb 2026^ | Fixed mortgage rate | |
| Interest rate | 4.74% | 4.50% | 4.16% | 4.22% |
| Monthly Payment | £1,196 | £1,167 | £1,028 | £1,134 |
Rates are correct as of the 3rd December 2024 and based on a £210,000 mortgage over 25 years at 60% LTV
^ The assumed rates are based on predicted base rate changes at the time of writing
How to choose the right type of mortgage deal
Your affordability, future plans and the current mortgage market will play a key part in helping you decide between a tracker and a fixed-rate mortgage. To ensure that you don't overlook anything, you should speak with a mortgage expert who will assess your finances and ask you about your priorities and concerns. This will help them to guide you to the best type of mortgage deal based on your specific needs.
Your mortgage broker will scan the market for the best deals and will complete a review of your finances with you. Setting out realistic expectations around what you can afford in mortgage repayments will help your mortgage broker to select the most suitable and competitive mortgage rates.
If you do not have a mortgage broker, you can source one locally using the service provided by VouchedFor* - a website that directs you to vetted professionals in your area. Alternatively, you can get in touch with the mortgage broker, Habito* - an online mortgage broker that has access to over 90 lenders' mortgage deals and provides fast and efficient mortgage advice. You can also find more information in our article, "How to find a mortgage broker you can trust".
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