1. Fixed‑Rate Mortgages (Stability & Predictability)
A fixed‑rate mortgages keeps your interest rate the same for a set period — usually 2, 3, 5 or 10 years.
Why choose a fixed rate:
– Your monthly payments stay the same
– Easier budgeting
– Protection from rising interest rates
– Ideal for families with predictable expenses
Things to consider:
– You won’t benefit if rates fall
– Early Repayment Charges (ERCs) apply if you leave early
– ERCs are often tiered, for example: Year 1: 2%, Year 2: 1%
2. Variable‑Rate Mortgages (Flexibility & Movement)
Variable mortgages can go up or down, meaning your monthly payments may change.
2.1 Discounted Variable Rates
These offer a discount below the lender’s Standard Variable Rate (SVR).
Example: SVR 7%, Discount 2%, Rate 5%.
2.2 Tracker Mortgages
Tracker mortgages follow the Bank of England Base Rate plus a fixed margin.
Example: Base Rate 4.75%, Margin 0.50%, Rate 5.25%.
2.3 Standard Variable Rate (SVR)
This is the lender’s default rate once your deal ends.
Comparison Table:
| Feature | Fixed Rate | Tracker | Discounted Variable |
| Monthly payments | Stay the same | Can change | Can change |
| Follows Base Rate | No | Yes | No |
| Follows lender SVR | No | No | Yes |
| Early Repayment Charges | Usually | Sometimes | Sometimes |
| Best for | Budget certainty | Flexibility | Short‑term savings |
Which Mortgage Type Is Best for You in 2026?
Depends on budget, risk appetite, future plans, income stability, and preference for certainty or flexibility.
FAQs:
- Is a fixed or variable mortgage better in 2026?
Depends on priorities.
- What is the most common type of mortgage?
Fixed‑rate.
- Can I switch from fixed to variable?
Yes, but ERCs may apply.
- What happens when my fixed rate ends?
You move to the lender’s SVR unless you remortgage.
- Are tracker mortgages risky?
They can be if rates rise.
Speak to a Local Adviser in Hinckley
Call: 01455 63 61 63
Book online via our website.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Updated for 2026.
