Skip to content

Fixed-rate mortgages

Whether you’re buying your first home, moving home or remortgaging, our guide can help you decide whether a fixed-rate mortgage is right for you.

Discover the pros and cons, and what you need to know to choose the best fixed-rate mortgage for your circumstances, if that’s what you’re going for.

What is a fixed-rate mortgage? 

A fixed-rate mortgage has an interest rate that remains the same for a set period – typically for two, three or five years, but it can sometimes be up to 10.

This means you’ll know exactly how much your monthly repayments will cost, making it easier to budget.

As well as the interest rate, you often have to pay an arrangement fee. And there may be other fees to pay, such as legal and valuation fees (which is the case with most mortgages).

At the end of the fixed-rate mortgage, your interest rate typically returns to the lender’s standard variable rate (SVR). This tends to be higher than most fixed rates available at the time.

It’s a good idea to start shopping around for a new mortgage deal around six months before a fixed rate comes to an end, so you’re on the lowest possible rate then.

IMPORTANT: Before we go any further, it’s important to stress that getting a mortgage is a big commitment, and for most people it’s best to get advice from a qualified mortgage broker. This article aims to equip you with the key facts to make a decision for yourself and give you as much additional knowledge and confidence as possible, but should never replace getting good advice.

What are the pros and cons of fixed-rate mortgages?

Like all mortgage deals, fixed-rate mortgages come with pros and cons:

Pros:

  • You’ll have a consistent monthly repayment, making it easier to budget.
  • You’ll be protected from interest rate rises if the Bank of England raises the base rate during your mortgage period.
  • Good value when interest rates are low, assuming they stay low.

Cons:

  • If interest rates fall, you could end up paying more than if you had a variable-rate mortgage.
  • If you want to move before the end of the fixed term, you may end up paying early repayment charges.

What’s the difference between fixed and variable-rate mortgages?

With fixed-rate mortgages, the interest rate is fixed for a set period. Whatever happens, it won’t change during that period.

With variable-rate mortgages, the interest rate can fluctuate in line with market conditions.

Types of variable mortgages include:

  • Tracker mortgages: the interest rate will rise and fall, typically in line with the Bank of England base rate. Some deals track the lender’s own version of the base rate.
  • Discounted rate mortgages: these offer a discount on the lender’s standard variable rate for a set amount of time.

Why might you choose a fixed-rate mortgage?

Fixed-rate mortgages can be a good option if you want the certainty of knowing your repayments won’t go up if interest rates rise.

And by knowing exactly how much you need to pay towards your fixed-rate mortgage each month, you’ll know how much to set aside for your repayments.

If you take out a fixed-rate mortgage when interest rates are low, you could get a much cheaper deal than with a variable-rate mortgage.

This isn’t us saying they’re the right option for you, as there are cons that we reference above. Make sure you weigh up your options.

How to get the best fixed-rate mortgage deal

As well as getting advice from a mortgage broker, here are some practical steps to land the best fixed-rate mortgage deal for your needs:

Put down a decent deposit

Being able to put down a chunky deposit – ideally 10% or more – will help, and many lenders require that as a minimum.

The higher your deposit, the better the interest rate you’re likely to be offered. A deposit of 40% will generally get you a fixed-rate mortgage deal with the lowest interest from that lender, though this threshold can vary by lender.

If you’re remortgaging, your deposit will include the equity you’ve built up in your home.

Check your credit score and correct errors

The better your credit score, the better the fixed-rate mortgage deal you’re likely to be offered.

That’s because mortgage lenders look at your credit rating to determine if, and at what rate, they want to offer you a mortgage loan.

If you spot an error, then try to get it corrected. See our credit scores guide for how to do that.

Shop around for the best fixed-rate mortgage deals

By comparing fixed-rate mortgages from a variety of lenders, you can find quotes to suit your circumstances and budget.

Whether you’re looking for a two-year fixed-rate mortgage deals or want to see quotes for longer fixed-rate mortgage deals, we’ll help you compare.

If you just went to your bank you’d only have its deals to choose from, whereas by comparing the market you can see the multitude of options.

Check that you’re getting the right mortgage for your needs, and seek advice if unsure

While a fixed-rate mortgage can offer attractively lower rates and consistency, it might not be the best mortgage for everyone.

Check upfront fees and early repayment penalties before you decide on a fixed-rate mortgage.

As we say earlier, it’s often wise to get advice from a mortgage broker.

What will my fixed-rate mortgage cost?

The cost of your fixed-rate mortgage depends on its terms. These include:

  • The size of the mortgage
  • The interest rate
  • The length of the mortgage
  • Mortgage fees.

How to decide the length of your fixed-rate mortgage deal

Typically, lenders offer two-year fixed-rate mortgages and five-year fixed-rate mortgage deals as standard. A few may offer three or ten-year fixes.

A two-year fixed-rate mortgage can be a good option if you think you might move in the near future. It could be a good choice when interest rates are high but look as if they may come down in the medium term. But without a crystal ball, no one can say for certain what will happen.

A five-year fixed-rate mortgage could be a good option if you prefer a little more stability and aren’t planning on moving any time soon. It’s a popular choice when interest rates are low. As we’ve said above, seek mortgage advice if you’re unsure.

To find out how much you could borrow and how much it could cost, use our mortgage calculator.

Mortgage calculator

What to watch out for with a fixed-rate mortgage

Check the arrangement fee (paid to a lender to establish your mortgage) and other costs you might have to pay.

The arrangement fee can be a flat rate or a percentage of the loan amount. Sometimes, a mortgage with a higher interest rate and lower fees could work out cheaper than a mortgage with a lower interest rate and higher fees. A good mortgage broker can help you make that decision.

When is a good time to fix?

If you’re trying to time the market to get the cheapest possible fix, without a crystal ball you’re likely to fall short. So just based on the things you can control, it’s wise to check rates about six months before your current deal is ending. Of course, if you’re a first-time buyer, it’s when you’re looking for a new place to live.

If you’re not sure, you can get advice from our partner London & Country Mortgages Ltd (L&C)**. It tracks the market and will know whether fixing now is a smart move.

What do I need to compare mortgages?

To start comparing fixed-rate mortgages, you’ll need to provide a few details, including:

  • How much you want to borrow
  • How long you want to fix your mortgage rate for
  • Whether you’re looking for a residential or buy-to-let mortgage
  • Whether you’re a first-time buyer
  • The amount of deposit you can provide.

Compare fixed rate mortgages  

Comparing fixed-rate mortgages with Compare the Market is easy. We’ll do all the hard work for you.

You just need to tell us the property value, what deposit you have and the period of time you want to repay the mortgage.

Plus, you can get free impartial, mortgage advice from our specialist partners London & Country Mortgages Ltd**.

About London & Country Mortgages Ltd (L&C)

**London & Country Mortgages Ltd (L&C) is a multi-award-winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002).

L&C is not a part of Compare the Market Limited. Compare the Market receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.

L&C will not charge you a broker fee should you decide to proceed with a mortgage.

Frequently asked questions

What are the advantages of a longer fixed-term mortgage?

Taking out a longer fixed-term mortgage can have advantages:

  • If interest rates go up, you’ll be protected from price hikes. Your monthly repayments will stay the same for the duration of your fixed term
  • Because you won’t need to remortgage every couple of years, for example, to avoid reverting to your lender’s SVR, you could avoid repeated remortgaging costs.

If you’re not intending to move for a while, a longer fixed-term mortgage could be a good option.

On the flip side, if you want to move and borrow more to do so, you’ll be dependent on rates at the time and your credit score then.

What is the longest you can fix a mortgage for?

Most lenders offer fixes of up to five years, but a few may go up to ten years.

What happens when the fixed period ends on your mortgage?

When the fixed-rate mortgage period is up, your mortgage will probably switch to the lender’s standard variable rate, which is likely to be higher than the fixed rate.

You could consider remortgaging and getting another fixed-rate deal. This could be with your existing mortgage lender or a different one.

Can you leave a fixed-rate mortgage early or pay it off early?

You can leave a fixed-rate mortgage early or pay it off early. But you’ll typically pay an early repayment charge. This is usually a percentage of your outstanding mortgage balance and can be high.

Consider getting advice from a mortgage broker to see if leaving your mortgage deal early is the right decision for you.

Can I overpay my fixed-rate mortgage?

You can usually overpay your fixed-rate mortgage. Check the details of your deal for the conditions around overpaying. Some lenders will let you overpay by a set amount, say up to 10%. If you want to overpay more, there may be an early repayment charge.

Will applying for a fixed-rate mortgage affect my credit rating?

A mortgage application may decrease your credit score temporarily, but only slightly.

And this temporary drop should resolve itself after a few months of you paying your mortgage on time.

If you miss a mortgage repayment, it will negatively affect your credit score.

Author image Guy Anker

What our expert says...

“Fixed-rate mortgages will suit many people, especially those who value certainty, but they’re not suitable for everyone’s circumstances. Compare mortgages with us and we can help you look for a deal that’s right for you. For most people, it’s also worth getting advice from a qualified mortgage broker, as getting a home loan is a big commitment and things can go wrong if you don’t know what you’re doing.”

- Guy Anker, Personal finance and insurance expert

Looking for a mortgage?

Compare mortgages in minutes to see if you can save.

Compare now
Page last reviewed on 27 JANUARY 2025
by The Editorial Team