Comparison · 2025
Fixed vs Variable Mortgage UK
Over 85% of new UK mortgages are fixed-rate, but trackers and variable rates have moments to shine. With BoE rates likely to fall in late 2025, the choice matters more than ever.
UK Mortgage Rate Options (2025)
| Type | Typical rate | When best |
|---|---|---|
| 2-year fix | ~4.3% | Expect rates to fall short-term |
| 5-year fix | ~4.0% | Most common, balance of certainty + value |
| 10-year fix | ~4.5% | Long-term homeowners, maximum certainty |
| Tracker | ~Base + 0.5% (5.75%) | Falling-rate environment, no ERCs |
| SVR (lender default) | ~7-8% | Almost never — always remortgage |
Why Fix is Most Popular
- Certainty — monthly payment doesn\'t change for term
- Sleep at night — no rate-anxiety
- Easy budgeting — fixed number for fixed term
- Bank stress tests easier to pass
Downside: Early Repayment Charges (ERCs) of 1-5% if you sell/remortgage during the fix.
When Tracker Wins
- You expect BoE rates to fall significantly
- You might move/sell during the term (no ERCs on most trackers)
- You have a buffer if rates spike
- You\'re paying down capital aggressively
2-Year vs 5-Year Fix
In 2025 the 5-year fix is typically 0.2-0.3% cheaper than the 2-year, reflecting market expectations of rate cuts. Worked example on £250k mortgage:
- 2-year fix at 4.3%: £1,360/month, total over 2 years = £32,640
- 5-year fix at 4.0%: £1,318/month, total over 2 years = £31,632
- Saving for 5-year: £42/month, £1,000 over 2 years
But: 2-year lets you re-fix if rates fall significantly. The decision is essentially a bet on whether rates fall faster than the 0.3% market spread implies.
Calculators
Calculators for this topic
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Remortgage Calculator
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Buy-to-Let Calculator
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Disclaimer: Mortgage rates and recommendations change. Use a fee-free mortgage broker for personalised advice.