Fixed Rate Mortgage

A fixed rate mortgage locks your interest rate for a set period. Your monthly payment stays exactly the same regardless of what happens to the Bank of England base rate or your lender's standard variable rate. This predictability makes fixed rates the most popular choice for UK borrowers — around 95% of new mortgages are fixed rate deals.

Common fixed rate terms

The most common options are 2-year and 5-year fixes. A 2-year fix gives you a shorter commitment and the flexibility to switch sooner, but the rate is often slightly higher than a 5-year fix. A 5-year fix provides longer certainty and may also give you a higher maximum borrowing amount because many lenders apply a reduced stress test for fixes of 5 years or longer.

Some lenders also offer 7-year and 10-year fixes. These provide maximum certainty but come with longer early repayment charge periods. They suit borrowers who value stability and plan to stay in the same property for a long time.

Early repayment charges

The main trade-off with a fixed rate is the early repayment charge (ERC). If you want to leave your fixed deal before it ends — whether to remortgage, move house, or repay the mortgage — you will typically pay a penalty. ERCs are usually between 1% and 5% of the outstanding balance, and they decrease each year of the fix. On a £200,000 mortgage, a 3% ERC would cost £6,000, so it is important to choose a fix length that matches your plans.

Pros and cons

The main advantage is certainty. You know exactly what your payment will be, which makes budgeting straightforward. If rates rise during your fix, you are protected. The downside is that if rates fall, you do not benefit until your fix ends. And the ERCs mean you lose flexibility if your circumstances change. For most buyers, the security of a fixed rate outweighs the potential upside of a tracker mortgage.

Last updated: April 2026