Fixed Rate Mortgage UK - Your Complete Guide
A fixed rate mortgage is the most popular mortgage type in the UK, offering the certainty of knowing exactly what your payments will be each month. According to Bank of England data, around 80% of new mortgages are fixed rate products. Whether you're a first-time buyer or looking to remortgage, understanding how fixed rates work is essential for making the right choice.
Fixed Rate Mortgages at a Glance
80%
of new mortgages
2-10
Years fixed terms
4.0-5.5%
Current rate range
1-5%
Early exit charges
How Does a Fixed Rate Mortgage Work?
A fixed rate mortgage locks in your interest rate for a set period, regardless of what happens to the Bank of England base rate. This means your monthly payments stay exactly the same throughout the fixed period, making budgeting straightforward.
Example: How Your Payments Stay Fixed
Your Fixed Rate
4.5%
Monthly Payment (£250K loan)
£1,389
If the base rate rises from 4.5% to 5.5%, your payment stays at £1,389. If it falls to 3.5%, you still pay £1,389. That's the trade-off for certainty.
Use our mortgage calculator to see what your payments would be.
The Fixed Rate Timeline
- Application: You apply for a fixed rate mortgage and lock in a rate (often valid for 3-6 months until completion).
- Fixed Period: Your rate and payments stay the same for 2, 3, 5, or 10 years regardless of market changes.
- End of Fix: 3-6 months before your fix ends, start looking for a new deal to avoid the SVR.
- Remortgage or SVR: Either switch to a new fixed deal or move to your lender's Standard Variable Rate.
Current Fixed Rate Mortgage Rates
Fixed mortgage rates are influenced by SWAP rates (interbank lending rates) rather than directly by the Bank of England base rate. This is why fixed rates sometimes move independently of base rate decisions.
Indicative Fixed Rates (January 2026)
| LTV | 2-Year Fix | 5-Year Fix | 10-Year Fix |
|---|---|---|---|
| 60% LTV | 4.2% | 4.0% | 4.4% |
| 75% LTV | 4.5% | 4.3% | 4.6% |
| 90% LTV | 5.0% | 4.8% | 5.1% |
| 95% LTV | 5.5% | 5.3% | N/A |
Rates are indicative and change frequently. Visit our mortgage rates page for the latest information.
2-Year vs 5-Year Fixed Rate Mortgage
Choosing between a 2-year and 5-year fix is one of the most common mortgage decisions. Each has advantages depending on your circumstances and view on future interest rates.
2-Year Fixed Rate
- ✓ Can access new deals sooner if rates fall
- ✓ Lower early repayment charges (typically 1-2%)
- ✓ Good if you might move house soon
- ✓ More flexibility overall
- ✗ Remortgage costs every 2 years
- ✗ Risk of rate rises at renewal
- ✗ Often slightly higher rate than 5-year
5-Year Fixed Rate
- ✓ Long-term payment certainty
- ✓ Protection from rate rises for 5 years
- ✓ Often cheaper than 2-year currently
- ✓ Less frequent remortgage hassle
- ✗ Stuck if rates fall significantly
- ✗ Higher ERCs (typically 3-5%)
- ✗ Less flexibility if circumstances change
Current Market Observation
In early 2026, 5-year fixed rates are often cheaper than 2-year rates. This "inverted" pricing reflects market expectations that interest rates will fall over the next few years. When markets expect falling rates, longer fixes are priced more competitively.
Fixed Rate Mortgage Pros and Cons
Advantages
- ✓Budget Certainty
Know exactly what you'll pay each month, making household budgeting easier
- ✓Protection from Rate Rises
Payments stay the same even if the base rate increases significantly
- ✓Peace of Mind
No need to worry about economic news or interest rate decisions
- ✓Wide Availability
Most lenders offer fixed rates, giving you plenty of choice
Disadvantages
- ✗Miss Out if Rates Fall
Your rate stays the same even if market rates drop significantly
- ✗Early Repayment Charges
Leaving early can cost 1-5% of your loan - potentially thousands of pounds
- ✗Less Flexibility
Limited ability to make large overpayments or switch products
- ✗Can Be Higher Initial Rate
Often higher starting rate than tracker or discount mortgages
When Should You Choose a Fixed Rate?
A fixed rate mortgage is typically the right choice if:
You Value Certainty
If knowing exactly what you'll pay each month is important for your peace of mind and budgeting.
Your Budget is Tight
If a rate rise would stretch your finances, fixing protects you from payment increases.
You Expect Rates to Rise
If you believe interest rates will increase, locking in now protects you from future rises.
You're a First-Time Buyer
Starting with certainty helps you adjust to mortgage payments without surprises.
You're Planning Ahead
If you're having a baby, changing jobs, or facing other changes, stable payments help planning.
You Can't Afford Increases
If even a 1-2% rate rise would cause financial difficulty, fixing eliminates that risk.
Consider a tracker mortgage instead if you have financial flexibility and expect rates to fall.
Fixed Rate Mortgage FAQs
What is a fixed rate mortgage?
A fixed rate mortgage locks your interest rate for a set period (typically 2, 3, 5, or 10 years). Your monthly payments stay the same regardless of Bank of England base rate changes, providing budgeting certainty. When the fixed period ends, you'll move to your lender's Standard Variable Rate unless you remortgage.
Should I choose a 2-year or 5-year fixed rate?
It depends on your circumstances. 2-year fixes offer lower rates and more flexibility but mean remortgaging sooner. 5-year fixes provide longer stability and protection from rate rises but may cost more if rates fall. Consider your plans, risk tolerance, and the current rate environment.
What happens at the end of a fixed rate mortgage?
When your fixed period ends, you'll automatically move to your lender's Standard Variable Rate (SVR), which is typically 2-4% higher. Most borrowers remortgage before this happens to secure a new fixed deal. Start looking 3-6 months before your fix ends.
Can I pay off my fixed rate mortgage early?
Yes, but you'll usually face Early Repayment Charges (ERCs), typically 1-5% of the amount repaid. Some mortgages allow overpayments up to 10% per year without penalty. Check your mortgage terms before making large payments.
Are fixed rates higher than variable rates?
Fixed rates are often slightly higher than initial tracker or discount rates because you're paying for certainty. However, they protect you from rate increases. Currently, 5-year fixes can be cheaper than 2-year fixes as lenders expect rates to fall.
Can I move house with a fixed rate mortgage?
Most fixed rate mortgages are 'portable', meaning you can transfer them to a new property. However, you'll need to pass affordability checks and the new property must meet lending criteria. If you need to borrow more, the additional amount may be at a different rate.
Related Mortgage Tools & Guides
Summary
A fixed rate mortgage offers the certainty of knowing exactly what your payments will be throughout the fixed period. With around 80% of UK borrowers choosing fixed rates, it's the most popular mortgage type for good reason. Whether you opt for a 2-year or 5-year fix depends on your circumstances, plans, and view on future interest rates. Use our mortgage calculator to see what your payments would be, and start comparing deals on our mortgage rates page. Consider consulting an FCA-registered mortgage broker for personalised advice on the best fixed rate for your situation.