Fixed vs Variable Mortgages: Which Is Better?

Is it better to lock your mortgage rate in now, or keep things flexible and see how the market moves? This is one of the most common questions borrowers ask, and it usually comes at a moment when the decision feels expensive. Rates change, deals expire, headlines get louder, and suddenly the choice feels bigger than it should.

Most people are not choosing between right and wrong. They are choosing between certainty and flexibility. That is why the fixed vs variable rate mortgage debate rarely has a simple answer that suits everyone. The reality is that what works for one household could feel completely wrong for another, even if the numbers look similar on paper.

In this article, we break down how fixed and variable mortgages work in real terms, who each option tends to suit in the UK, and how to think through the decision without guessing the future or relying on headlines. Let’s jump in.

Fixed-Rate Mortgage Explained

The fundamentals of a fixed-rate mortgage is that it keeps your interest rate the same for a set period of time. This period will usually be a two, three, five, or ten year fixed-deal, though longer options do exist and will depend on your chosen lender.
As a result of a fixed rate mortgage, your monthly payment does not change while the deal is fixed, even if interest rates rise or fall elsewhere.

This stability is the main reason people look at fixed rate mortgages and makes them the most popular type of mortgage options for first-time buyers. In the scenario that your income is steady but your outgoings already feel tight, the advantage of knowing exactly what your mortgage will cost each month can help make your financial planning far easier than worrying about any forecasted rate changes or predictions. In summary, a fixed-rate mortgage removes the worry of any sudden payment jumps, and provides a clear financial outlook for your fixed-term period.

While you may have already decided that the security that a fixed-rate mortgage offers best matches your situation, the next question that often follows is: how long to fix a mortgage for?

Ultimately, short fixes offer more flexibility but less protection. Whereas, longer term fixes offer extended security but reduces the opportunity to change course or take advantage of interest rates should they fall.

Another common concern is understanding exactly what happens when a fixed rate mortgage ends. When a fixed-term mortgage finishes, the loan will then usually move onto the lender’s standard variable rate (SVR). These rates are set by the lender and can often be much higher than the Bank of England’s Bank Rate. For this reason, many borrowers decide to remortgage before the deal expires.

What Are the Pros and Cons of a Fixed-Rate Mortgage?

Fixed-rate mortgage deals are one of the most popular loan options on the mortgage market today, but that doesn’t mean they’re perfect. There are many pros and cons to opting for a fixed-rate mortgage and it is crucial that you assess both the advantages and drawbacks in relation to your financial plans for the future.
Below, we have created a quick outline of the main points you need to remember about fixed-rate mortgages:

Pros of a Fixed-Rate Mortgage

• Monthly payments stay the same during the fixed period
• Protection against rises in interest rates
• Easier budgeting for households with fixed income
• Often preferred by first-time buyers and families

Cons of a Fixed-Rate Mortgage

• No benefit if interest rates fall
• Early repayment charges can be expensive
• Less flexibility if your situation or plans suddenly change
• Longer fixes can feel restrictive

When considering a fixed-rate mortgage, one of the most common questions that we get asked is: can you get out of a fixed rate mortgage?

In short: yes, you usually can usually end your fixed-rate mortgage ahead of schedule. However, many lenders will apply early repayment charges (ERC) to mitigate their losses and compensate for the interest that they would have lost if the loan reached its agreed length.

While the exact ERC can vary depending on your chosen lender, these charges can be significant, particularly on longer deals. When looking at the pros and cons of a longer 5-year fixed mortgage vs a 10-year fixed mortgage, this lack of flexibility and risk of ERC can become the biggest trade-off.

Who Is a Fixed-Rate Mortgage Best For in the UK?

On the whole, fixed-rate mortgage deals tend to suit those who value the predictability of monthly payments over adaptability. Should an unexpected rise in payments be enough to put additional pressure on your household finances, then the security of a fixed-rate deal can feel reassuring.

Fixed-rate deals are especially common among first-time buyers as it is the predictability of payments that removes one major unknown during an already costly stage of life. Fixed-rate mortgages for first-time buyers also make it easier to plan around rent replacement, childcare, and rising living costs.

With that said, fixed-rates can also suit anyone who is planning to stay in the same property for several years or does not expect their income or circumstances to change much during that time.

At Boon Brokers, our dedicated mortgage advisers can walk you through how fixed-rate mortgages work, helping you to understand the best options that match your financial situation and plans for the future. As a fee-free and whole of market mortgage broker, we can help you understand and explore different mortgage structures, costs, and deals that suit your needs.

What Is a Variable-Rate Mortgage

A variable-rate mortgage does not lock your interest rate. Instead, the interest rate can change during the full time of the mortgage loan with interest rate changes depending on the exact type of variable rate and the lender’s individual pricing.

At Boon Brokers, one of the most common questions we get asked is: what is a variable rate mortgage? Typically, variable rate mortgages will refer to a few different options, with the most common being the standard variable rate mortgage, which is the lender’s default rate.

Other types of variable mortgage include tracker mortgages, which follow the Bank of England base rate plus a margin, and discount mortgages, which offer a reduction from the lender’s standard rate for a set period.

Understanding the ins and outs of how a variable rate mortgage works is vitally important as the changes can directly affect your monthly payment and overall interest. Should rates fall, your mortgage can become cheaper without you doing anything. But should rates rise, your payment will likely increase, and this additional cost can sometimes be introduced very quickly.

Variable mortgages are often used as short-term solutions. Some borrowers choose them while waiting to remortgage, sell, or move. Others use them because they expect rates to drop and are comfortable with any risk of increased rates in the meantime.

What Are the Pros and Cons of a Variable-Rate Mortgage?

Variable-rate mortgage deals can work very well in the right circumstances, but they are not suited to everyone and require a different mindset than those looking for reliability of monthly payments.
Unlike fixed deals, the interest rate on a variable mortgage can change during the life of the loan, which means your monthly payments are not guaranteed to stay the same. While this flexibility can be appealing for some borrowers with short-term plans or room in their budget, it also brings a level of uncertainty that needs to be thought through carefully.

Below, we have outlined the key advantages and disadvantages of choosing a variable-rate mortgage, so that you can compare the main pros and cons against your own financial plans.

Pros of a Variable-Rate Mortgage

• Payments can fall if interest rates drop
• Often fewer or lower early repayment charges
• Greater flexibility to remortgage or move
• Useful for short-term or transitional plans

Cons of a Variable-Rate Mortgage

• Payments can rise at short notice
• Budgeting is less predictable
• Vulnerable to wider market changes
• Standard variable rates can be expensive

When deciding on whether a standard variable-rate mortgage plan is right for you, it is important to consider how a change in interest rates would affect your personal financial standing.

Who Is a Variable-Rate Mortgage Best For in the UK?

When rates are already high or have been elevated for a period, some borrowers may hesitate to lock in a fixed-rate deal because they expect rates to fall in the future. It is usually at this time that questions like “is a fixed-rate better than a variable-rate mortgage?” start to hit the headlines.

The reality is that whether a variable-rate mortgage is right for you will wholly depend on your personal finances, plans for the future, and your ability to balance the risk of a potential interest rise. A variable deal can work well if you have spare income or savings to cover any unexpected payment increases and a short-term plan that limits your exposure.

In addition, a variable-rate mortgage plan can also suit borrowers who have only a small portion of their mortgage left to pay. In these cases, switching costs and early repayment charges can outweigh the savings from a fixed-rate deal, making a variable option much more practical. Similarly, if you plan to move or sell your property within a few years, a variable mortgage provides flexibility without the risk of paying high exit fees on a fixed-term deal.

Ultimately, the best choice comes down to how comfortable you are with fluctuating payments, the remaining term of your mortgage, and your short- or medium-term plans. While fixed deals can offer peace of mind, a variable-rate mortgage can be a strategic choice when approached with care and planning.

Are Hybrid or Part-and-Part Mortgages Available in the UK?

Yes, a part-and-part mortgage – most commonly referred to as a hybrid mortgage – is available in the UK, though they are less common and often misunderstood. What people sometimes search for as a hybrid mortgage is usually a part and part mortgage, where the loan is split between capital repayment and interest-only portions.

The key benefit of this type of mortgage setup is that it can help reduce monthly payments while still paying down some of the loan’s capital.

Let’s take a look at a practical example:

Imagine a borrower has a £200,000 mortgage. With a part and part mortgage, they might place £100,000 on a capital repayment deal, where the monthly payment reduces the balance over time, and the other £100,000 on an interest-only deal, where the monthly payment covers only the interest.

This combination lowers the overall monthly payment, making it more manageable, while still chipping away at the principal on part of the loan. As a result, part and part mortgage arrangements are often used for larger loans, or situations where borrowers want some certainty but cannot comfortably meet the full repayment schedule.

There are many lenders that offer part and part or hybrid mortgages, though availability varies between lenders. If you are interested in learning more about part and part mortgage lenders, our expert mortgage brokers at Boon Brokers can help you find the best deal that matches your long-term plans.

How Should I Choose Between a Fixed and Variable Mortgage?

At the route of this question, most borrowers are really asking one thing: how much uncertainty can I live with? That is the heart of the variable or fixed mortgage decision.

If the stable payments of a fixed mortgage repayment schedule will help you plan and reduce your stress, then a fixed-rate mortgage might be the best option for your circumstances. On the other hand, if your focus is on flexibility, taking advantage of predicted falls in interest rates, and you have room in your budget, then a variable-rate mortgage could work well.

To help you with your decision, below we have prepared a simple comparison to help frame and compare each feature of fixed-rate vs variable-rate mortgages:

Fixed vs Variable Mortgage: Which Is Better Overall?

If you are unsure whether a fixed or variable mortgage is right for you, a whole-of-market broker can help you explore all of your options. At Boon Brokers, our dedicated mortgage experts will help guide you through the decision-making process, providing customised advice based on your unique financial plans and budget.

Our fee‑free, whole-of-market service ensures you can compare all available deals from across the market, without the stress of filtering through industry jargon or hidden fees. We take the time to understand your situation and help you choose a mortgage that matches your needs.

Contact Boon Brokers today to arrange a free consultation with one of our expert advisers and get impartial advice tailored to your needs.