Guide · 4 minute read · Updated 10 Jul 2026

Fixed, tracker or variable: which mortgage type is right?

A fixed rate buys you a payment that cannot change for the deal period. A tracker follows the Bank of England base rate up and down. A variable rate is set by the lender and is usually the most expensive place to be. The right choice comes down to how much certainty you want and where you think rates are heading.

Fixed rate: you pay for certainty

With a fixed rate your interest rate, and therefore your monthly payment, is locked for a set term, most commonly two or five years. If rates rise, you are protected; if they fall, you do not benefit until the fix ends. You are paying a small premium for a payment you can plan your life around.

Fixed rates suit anyone on a tight budget who needs to know the number, or anyone who simply does not want to watch base-rate decisions. The trade-off is flexibility: most fixes carry early repayment charges, often 1% to 5% of the balance, if you leave before the term is up. Our separate guide on choosing between a two and five-year fix covers that specific decision in detail.

Tracker: it moves with the base rate

A tracker is priced as the Bank of England base rate plus a fixed margin, for example base rate plus 0.75%. With the base rate at 3.75% in mid-2026, that deal charges 4.50%. If the Bank raises the base rate by 0.25%, your rate becomes 4.75% and your payment rises the following month; if it cuts, you pay less.

Trackers suit borrowers who expect rates to fall, or who can absorb a rise without strain. On a £200,000 balance, a 0.25% move is roughly £25 to £30 a month, so you need headroom for several of those. Many trackers have no early repayment charge, which makes them useful if you might move or remortgage soon, or want to make large overpayments.

Standard variable rate: the one to avoid drifting onto

The standard variable rate, or SVR, is the lender's own default rate. It is not pinned to the base rate; the lender can change it more or less at will, and it is typically the highest rate the lender offers, often well above a fresh fixed or tracker deal.

You almost never choose the SVR. You land on it by accident, when a fixed or tracker deal ends and you have not lined up a new one. Payments can jump sharply overnight. The fix is easy: start shopping for a new deal three to six months before your current one expires, and use the remortgage calculator to check the saving from switching rather than lapsing onto the SVR.

Discount rate: a margin below the SVR

A discount tracks the lender's SVR at a set reduction, say SVR minus 1.5%, for an introductory period. It is cheaper than the SVR while it lasts, but because the SVR itself can move at the lender's discretion, it gives you less certainty than a base-rate tracker. Discounts tend to appear from smaller building societies and can be competitive, but read what the underlying SVR is before you judge the headline discount.

So which one?

Choose a fix if certainty matters most and you will stay put for the term. Choose a tracker if you can handle movement and want flexibility or a bet on falling rates. Never sit on the SVR by default. Whatever you pick, run the balance and rate through the mortgage repayment calculator so you are comparing real monthly costs, not just headline percentages.

Common questions

Is a fixed or variable mortgage better?

Neither is universally better. A fixed rate gives a set payment for two to five years and protects you if rates rise, at the cost of flexibility and early repayment charges. A variable or tracker can be cheaper and more flexible but your payment can move. Certainty versus flexibility is the real trade-off.

What is the difference between a tracker and a standard variable rate?

A tracker is fixed to the Bank of England base rate plus a set margin, so it moves only when the base rate moves. A standard variable rate is set by the lender at its own discretion and is usually the most expensive option, which is why you should avoid drifting onto it.

What happens when my fixed rate ends?

If you do nothing, you roll onto the lender's standard variable rate, which is typically much higher and can raise your payment sharply. Start looking for a new deal three to six months before your fix ends so you can switch straight onto a fresh rate.

Can I overpay on a tracker mortgage?

Often yes, and many trackers have no early repayment charge, so you can overpay freely. Fixed deals usually allow overpayments up to 10% of the balance a year before charges apply. Always check your specific deal's terms first.

Guidance and education, not regulated financial advice.