We often get asked about the difference of a fixed vs variable rate mortgage. Here it is, in a nutsell.
With a fixed rate mortgage, your mortgage repayments will remain the same for an agreed fixed rate period – often from two to five years. After that, it’s common to remortgage to a new fixed rate deal, or your mortgage will revert to your lender’s standard variable rate (SVR).
With a variable rate mortgage, your mortgage payments could go up or down during your mortgage term.
Types of variable rate mortgages
There are two main types of variable mortgage:
- Tracker mortgages, which track the Bank of England base rate, and;
- Discount mortgages, which offer a fixed discount on the lender’s SVR (which can fluctuate).
How to decide on fixed vs variable rate mortgage
Your mortgage adviser will tell you what the best option for your circumstances is after completing a fact find with you and getting to know your requirements.