More than 1.5 million UK mortgage deals are due to expire in 2026. Remortgaging into a rising-rate environment โ with gilt yields at multi-decade highs and the Bank of England holding cautiously โ is one of the most consequential financial decisions many households will face this year.
This guide cuts through the noise: what fixed and tracker rates actually cost right now, how each behaves when rates move, and the three questions that determine which is right for you.
This is not financial advice. Speak to an independent mortgage broker before committing to any deal.
Fixed-rate mortgages in 2026: the numbers
Fixed rates are priced off swap rates, which closely track gilt yields. As gilt yields have climbed in early 2026, lenders have been passing higher costs into new fixed-rate products.
Approximate market rates as of May 2026 (two-year and five-year fixes, 75% LTV):
| Term | Average rate | Monthly cost on ยฃ200,000 mortgage |
|---|---|---|
| 2-year fix | 4.5โ5.1% | ยฃ1,130โยฃ1,195 |
| 5-year fix | 4.3โ4.9% | ยฃ1,108โยฃ1,175 |
| 10-year fix | 4.6โ5.0% | ยฃ1,143โยฃ1,185 |
Rates vary significantly by lender, loan-to-value, and your credit profile. The figures above are indicative.
Bottom line: The five-year fix is currently slightly cheaper than the two-year fix โ a sign the market expects rates to ease somewhat over the medium term, even if the short-term outlook is sticky.
Photo by Jakub Zerdzicki on Pexels
Tracker mortgages in 2026: the numbers
A tracker mortgage follows the Bank of England base rate plus a fixed margin โ typically 0.5โ1.5 percentage points above base. The Bank of England base rate currently sits at 4.5%.
| Tracker deal | Typical rate (base + margin) | Monthly cost on ยฃ200,000 |
|---|---|---|
| Lifetime tracker (base + 0.5%) | 5.0% | ยฃ1,185 |
| 2-year tracker (base + 0.75%) | 5.25% | ยฃ1,215 |
| 5-year tracker (base + 1%) | 5.5% | ยฃ1,248 |
Trackers look more expensive than fixes right now on headline rate โ but they move down automatically when the Bank of England cuts.
Five criteria that separate fixed from tracker
| Criterion | Fixed wins | Tracker wins |
|---|---|---|
| Budget certainty | You need identical monthly payments | You can absorb variability |
| Rate direction bet | You think rates will stay high or rise | You think cuts are coming soon |
| Time horizon | You are staying in the property | You may move within 2โ3 years |
| Early repayment risk | You are unlikely to repay early | You might need to exit the deal |
| Stress tolerance | Mortgage news raises your anxiety | You are comfortable monitoring rates |
Worth fixing if you want certainty; consider tracking if you expect cuts
The key question is what the Bank of England does over the next 12โ24 months. Markets currently price in two to three 0.25% cuts by end of 2027. If that happens, a tracker starting at 5.0% could fall to 4.25โ4.5% โ cheaper than most current five-year fixes.
The counterargument: oil price pressures and gilt market volatility could delay cuts or even force a rise. No one knows. A five-year fix buys you certainty and removes that uncertainty from your life entirely.
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Early repayment charges: the hidden tracker advantage
Most fixed-rate deals carry early repayment charges (ERCs) of 1โ5% of the outstanding balance if you exit before the fixed term ends. A tracker mortgage typically has no ERC (or a much lower one).
If you expect to sell, downsize, or make a large lump-sum overpayment within the next two years, ERCs on a five-year fix could cost you thousands. A tracker or a two-year fix gives more flexibility.
How to compare deals in practice
- Use the MoneyHelper mortgage calculator (moneyhelper.org.uk) to model monthly costs at different rates
- Get a mortgage in principle from at least two lenders before committing
- Use a whole-of-market broker โ they search deals direct lenders do not advertise
- Check the APRC (Annual Percentage Rate of Charge), not just the headline rate โ it includes fees
Remortgaging vs product transfer: often overlooked
When your current deal expires, your lender will typically offer you a product transfer โ switching to a new deal with the same lender without a full application. This is faster and requires no new affordability assessment. It is worth comparing the product transfer rate against the open market.
In a rising-rate environment, lenders sometimes offer competitive product transfers to retain customers. The reverse is also true โ some lenders sharpen their open-market rates to attract new business. There is no universal answer: you must compare both options directly.
A whole-of-market broker can show you open-market deals your lender will not tell you about. Many brokers charge no fee, earning commission from the lender on completion instead.
The overpayment opportunity
If you are currently on a tracker that is falling โ or on a fix with headroom โ consider whether overpayments make sense. Most lenders allow overpayments of up to 10% of the outstanding balance per year without triggering an early repayment charge.
Overpaying ยฃ200 per month on a ยฃ200,000 mortgage at 4.8% saves roughly ยฃ18,000 in interest over a 25-year term and cuts the repayment period by over three years. The maths changes when savings rates are comparable to your mortgage rate โ check both before deciding.
Skip this if you have less than 15% equity
If your loan-to-value is above 85%, most competitive fixed and tracker deals are unavailable to you. Focus first on building equity through overpayments or a rising property value before shopping for the best rates. Lenders reserve the sharpest pricing for lower-risk borrowers at 60โ75% LTV.
Bottom line: In May 2026, the five-year fix offers the best balance of rate and certainty for most households. Trackers suit those confident the Bank of England will cut within 18 months, or those who need the flexibility to exit early without a penalty.
Always use an FCA-regulated mortgage broker. Your home may be repossessed if you do not keep up repayments.
