Quick facts
- Bank of England base rate (May 2026): 4.25%
- Typical 2-year fixed rate: 4.4%โ4.8%
- Typical 5-year fixed rate: 4.2%โ4.6%
- Standard Variable Rate (SVR) average: 7.5%โ8.2% โ avoid reverting to this
A fixed rate offers certainty; a variable rate bets on future cuts
Fixed-rate mortgages lock your interest rate for a set term โ typically 2 or 5 years โ regardless of what the Bank of England does. Variable-rate products (trackers and SVRs) move with the base rate, meaning payments can fall but also rise unpredictably. The right choice depends on your risk tolerance, remaining mortgage term, and view on interest rates.
Bottom line: In May 2026, five-year fixes are priced lower than two-year fixes โ the market expects rates to remain roughly flat over the medium term. That pricing makes the five-year fix unusually attractive.
Head-to-head comparison
| Feature | Fixed Rate | Tracker Variable |
|---|---|---|
| Monthly payment | Constant for the term | Moves with base rate |
| Certainty | High โ budget easily | Low โ payments can change any month |
| Best if rates fall | You lose out (locked in) | Payments drop automatically |
| Best if rates rise | Protected | Payments rise |
| Early repayment charge (ERC) | Typically 1%โ5% of balance | Trackers often have lower or no ERC |
| Typical term | 2 or 5 years, then remortgage | Ongoing or tied to base rate |
Avoid the SVR. When a fixed deal expires, lenders move you onto their Standard Variable Rate โ currently 7.5โ8.2% for most major lenders. Remortgage before your deal ends or you will overpay significantly.
Bottom line: The SVR is almost never the right choice. Set a calendar reminder six months before your fixed term ends and start comparing new deals.
Which product fits which borrower?
- Choose a 5-year fix if: You want payment certainty, are on a tight budget, or plan to stay in the property long-term.
- Choose a 2-year fix if: You expect to move, remortgage, or make significant overpayments within two years โ and the ERC on a five-year deal would be costly.
- Choose a tracker if: You have a large emergency fund, expect rates to fall significantly, and can absorb payment increases without stress.
- Avoid interest-only unless you have a credible repayment vehicle (investment portfolio, property sale) โ lenders now require evidence.
Bottom line: Most borrowers over 45 benefit from the predictability of a five-year fix โ monthly costs are known, budgeting is straightforward, and the current pricing advantage makes it the logical default.
How to remortgage when your current deal ends
Remortgaging is the process of switching to a new deal โ either with your existing lender (a product transfer) or a new one. Both routes are worth comparing, as lenders compete hard for retention business.
- Start six months before your deal expires โ you can lock in a new rate and switch when the old term ends, with no gap in coverage
- Product transfer (same lender): Faster, no legal fees, no credit check in most cases โ but the rate may not be the market's best
- Full remortgage (new lender): Usually requires a solicitor and valuation, but opens the whole market; savings can be substantial on larger balances
- Porting: If you are moving home, many fixed-rate products can be transferred to the new property โ check your current deal's porting rules before paying an ERC
Bottom line: Compare both product transfer and full remortgage options rather than defaulting to whichever your lender presents first โ loyalty rarely pays in the mortgage market.
Compare mortgage rates โ MoneySavingExpertIndependent comparison tool โ not a bank โ
This article is for information only and does not constitute financial advice. This is not financial advice โ speak to a regulated mortgage broker before making any decision.
