Fixed Rate Mortgages Explained: Everything You Need to Know in 2025/26
A fixed rate mortgage is one where your interest rate stays the same for an agreed period — typically 2, 3, 5 or 10 years. During this time, your monthly repayment is completely predictable, shielding you from any changes to the Bank of England base rate or your lender's Standard Variable Rate. Once the fixed period ends, the mortgage rolls onto the lender's SVR unless you remortgage to a new deal.
As of February 2026, the Bank of England base rate sits at 4.75%. This follows a series of rate rises from the historic low of 0.1% in late 2021, peaking at 5.25% in 2023 before gradual cuts through 2024 and 2025. Fixed rate mortgages currently on the market reflect lenders' expectations of where rates are headed, which is why 5-year fixes are often slightly cheaper than 2-year fixes — lenders price in anticipated rate decreases.
Fixed vs Variable Mortgages: Key Differences
The two main types of mortgage in the UK are fixed rate and variable rate. A fixed rate mortgage gives you complete certainty: your payment will not change for the duration of the fixed period regardless of what happens in the wider economy. A variable rate mortgage (which includes tracker mortgages and discount mortgages as well as the SVR) can go up or down in line with the base rate or lender's own pricing decisions.
Tracker mortgages follow the Bank of England base rate at a set margin above it (e.g. base rate + 0.75%). When the base rate falls, so does your payment. The risk is that if rates rise unexpectedly, so does your mortgage payment. Discount mortgages apply a discount to the lender's SVR for a set period. They can be cheaper at the outset but offer less predictability.
For most borrowers in 2025/26, fixed rates are the dominant choice because they offer protection against rate uncertainty and allow precise monthly budgeting — crucial with the cost of living pressures of recent years.
How Does the SVR Work?
The Standard Variable Rate (SVR) is every mortgage lender's default rate. Once your fixed, tracker or discount deal expires, you automatically revert to the SVR unless you act. The SVR is set by the lender, not the Bank of England, and can change at any time. Most SVRs are between 7% and 9% in 2026 — significantly above the best fixed rate deals available.
Staying on the SVR means paying more than necessary. On a £240,000 mortgage with 20 years remaining, moving from an SVR of 8.5% to a 5-year fix at 4.2% would save approximately £370 per month — over £22,000 over five years. That is why remortgaging before your current deal expires is so important.
When to Remortgage: Getting Your Timing Right
Most mortgage advisers recommend starting to look for a new deal three to six months before your current fixed rate ends. Many lenders allow you to secure a new rate up to six months in advance. This means you can lock in today's rates without having to pay your current mortgage's early repayment charge, because the new deal does not start until your existing fixed period finishes.
If your fixed rate ends in the next three months and you have not yet started remortgaging, begin immediately. Even a few weeks on the SVR adds up. A move from 4.2% to the SVR of 8.5% on a £240,000 mortgage adds roughly £500 to your monthly payment.
UK Mortgage Rate Comparison: Major Lenders in 2026
Here is how the major UK mortgage lenders compare for typical fixed rate products in early 2026 (rates correct at time of writing and subject to change):
| Lender | 2-Year Fixed (75% LTV) | 5-Year Fixed (75% LTV) | Notable Feature |
|---|---|---|---|
| Nationwide | 4.39% | 4.19% | Porting available, loyalty remortgage rate |
| Halifax | 4.44% | 4.22% | Large case lending, new build specialist |
| Barclays | 4.36% | 4.14% | Springboard (guarantor) mortgage available |
| HSBC | 4.34% | 4.12% | Competitive for high earners, offset option |
| Santander | 4.42% | 4.20% | 95% LTV specialist, Help to Buy background |
| NatWest | 4.40% | 4.18% | Green mortgage discount for EPC A/B homes |
| Virgin Money | 4.46% | 4.24% | Cashback on remortgage, flexible overpayments |
Rates are indicative for borrowers with a 25% deposit and good credit history. Always obtain a personalised quote.
2-Year vs 5-Year Fixed: Which is Better in 2025?
This is the most debated mortgage question in the UK right now. Here is a structured comparison:
2-Year Fixed: Slightly higher rate but you are free to remortgage in two years. If interest rates fall further (as many economists predict through 2025-2026), you could move to a cheaper deal relatively soon. The downside is uncertainty — if rates do not fall as expected, your next deal might not be much cheaper, and you face two rounds of arrangement fees and conveyancing costs in five years.
5-Year Fixed: Lower starting rate in most cases, and you have five years of payment certainty. Ideal if you value budgeting stability, plan to stay in your current property for at least five years, and do not want the hassle of remortgaging in two years. The risk is being locked in at today's rates if they drop substantially before your deal ends.
In 2025/26, with the base rate at 4.75% and many economists expecting it to reach 3.5–4.0% by 2027, a 5-year fix offers slightly more rate certainty but may cost slightly more over the full period if rates do fall as predicted. Most brokers suggest that for those who cannot afford their payments to increase unexpectedly, a 5-year fix is the sensible choice.
Early Repayment Charges (ERCs) on Fixed Rate Mortgages
One of the biggest drawbacks of a fixed rate mortgage is the early repayment charge (ERC). If you want to leave your mortgage deal before the fixed period ends — for example, to move to a lower rate or because you are selling — you will usually pay a percentage of the outstanding balance. Typical ERCs are:
- Year 1: 5% of outstanding balance
- Year 2: 4% of outstanding balance
- Year 3: 3% of outstanding balance
- Year 4: 2% of outstanding balance
- Year 5: 1% of outstanding balance
On a £200,000 mortgage in year one, an ERC could cost £10,000. This is why it is critical to choose the right fixed period from the outset, and to check whether your mortgage is portable if you plan to move during the fixed period.
Porting a Fixed Rate Mortgage
Many fixed rate mortgages are portable, meaning you can transfer the mortgage to a new property if you move home during the fixed period, without paying an ERC. However, porting is not automatic. You still need to apply to your lender and pass their affordability checks on the new property. If the new property is more expensive, you may need a top-up loan at a new (potentially higher) rate for the additional borrowing.
If you think you might move within the next two to five years, always confirm a mortgage's portability before applying. Not all lenders offer portable mortgages, and even those that do may have restrictions.
Overpaying During Your Fixed Rate Period
Most fixed rate mortgages allow you to overpay by up to 10% of the outstanding balance per calendar year without incurring ERCs. Overpaying during the fixed period is one of the most powerful ways to reduce your mortgage balance, save interest, and potentially reach a lower LTV bracket when you come to remortgage.
For example, overpaying £200 per month on a £240,000 mortgage at 4.2% would save approximately £16,000 in interest over a 25-year term and cut around 3 years from the mortgage. Always check with your lender before making a lump sum payment and ensure it is within your annual overpayment allowance.
Broker vs Direct Application
You can apply for a fixed rate mortgage directly with a lender or through a mortgage broker. Direct applications can be quicker and may come with exclusive deals not available through brokers. However, you only see one lender's products.
A whole-of-market mortgage broker searches deals from most lenders (some have access to 90+ lenders) and can often find better rates, especially for borrowers with complex income situations, self-employment, or credit issues. Broker fees vary: some charge a flat fee of £300–£500, others charge a percentage of the loan, and some are fee-free (paid by lender commission).
For most borrowers, particularly those remortgaging, using a reputable broker is advisable. They handle the paperwork, liaise with the lender, and can often access exclusive rates unavailable to the public directly.