Fixed vs Tracker: Which Should You Choose?

When your mortgage deal is coming to an end, one of the biggest decisions you’ll face is whether to lock into a fixed rate or go with a tracker rate. Both options have their strengths, but they work very differently, so it’s worth understanding how each could affect your monthly payments and your long-term plans. We’ll break it down simply so you can make the right choice for your remortgage.

What is a Fixed-Rate Mortgage?

A fixed-rate mortgage keeps your interest rate and monthly repayments the same for a set period, usually two, three or five years. The biggest advantage is certainty. You’ll always know what you’re paying, which makes budgeting easier and protects you from any sudden rises in the Bank of England base rate.

The trade-off is that if interest rates fall, you won’t benefit because your deal is locked in. Fixed mortgages can also come with early repayment charges if you want to switch or pay off your loan before the deal ends.

What is a Tracker-Rate Mortgage?

A tracker mortgage moves in line with the Bank of England base rate, plus a small percentage added on top. This means your monthly repayments can go up or down depending on what happens to interest rates.

The real advantage of a tracker is that if the base rate is cut, your repayments could fall, saving you money. Some tracker mortgages also come with fewer restrictions, such as no early repayment charges, which can give you more flexibility if you want to make overpayments or switch deals sooner.

The downside is uncertainty. If the base rate rises, so will your repayments, which can make budgeting trickier compared to the stability of a fixed rate.

Fixed vs Tracker: Which Should You Choose?

It really comes down to your priorities. A fixed rate is ideal if you prefer peace of mind and stable payments, particularly if you want to stick to a strict budget or worry that rates might climb. A tracker rate could be better if you’re happy to take on some risk, want flexibility, or believe rates will drop in the near future.

Think about how comfortable you are with uncertainty. If you’d sleep easier knowing your payments won’t change, a fixed rate might suit you. If you’re open to a bit of fluctuation in return for potential savings, then a tracker could work.

Our Take at Turtle Mortgages

There’s no single answer that works for everyone. Your decision should be based on your circumstances, your goals, and how much risk you’re comfortable with. That’s why we take the time to go through both options with you, using your figures to show how each deal would play out in real life.

Sounds good, right? All you need to do is book a call with us.