The fixed vs tracker debate is really a question about risk tolerance. Neither is objectively better. One gives you certainty. The other gives you the chance to pay less — or more.
How fixed rate mortgages work
Your rate is locked for a set period — usually 2, 3, or 5 years. It doesn't matter what the Bank of England does during that time. Your payment stays the same.
That predictability has a real value. When rates spiked in 2022–2023, homeowners on fixed deals felt nothing. Those on trackers watched their payments jump by hundreds per month.
The trade-off: if rates fall sharply during your fixed term, you're stuck paying the higher rate until your deal ends. And there's usually an early repayment charge if you want out early.
How tracker mortgages work
Trackers follow the Bank of England base rate, plus a set margin. If the base rate drops, your payment drops automatically — no remortgage required.
When rates are falling, trackers can be significantly cheaper than fixed deals. The problem is that rates can also rise — and fast. A 0.5% rate rise on a £250,000 mortgage adds roughly £65–£80 per month.
Some trackers come with no early repayment charge, which is a genuine advantage. It means you can switch to a fixed deal the moment rates start moving against you.
The real question to ask
Not "which is cheaper right now?" — but "what happens to my budget if I'm wrong?"
If a £200/month payment increase would seriously stretch your finances, a fixed rate gives you protection that's worth paying for. If you have flexibility in your budget and think rates are heading down, a tracker could save you real money.
What most buyers do in 2025
The majority of UK buyers still choose fixed rates. The certainty is worth more than the potential saving — especially with mortgage payments already higher than they were three years ago.
Five-year fixes are popular because they avoid the cost and hassle of remortgaging every two years. Two-year fixes suit people who expect rates to fall and want flexibility sooner.
Run the numbers first
Use the mortgage cost comparison tool to put a fixed deal and a tracker side by side. See exactly how much the rate difference costs over the full term — then decide which risk you're more comfortable taking.