Fixed Rate Mortgages

Fixed-rate mortgages are the most common type of mortgage in the UK, but how do they work, how do you get the best deal, and what are the alternatives? In our guide to fixed-rate mortgages, we answers these questions and more.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a mortgage with an introductory rates period borrowers can lock themselves into to ensure that their repayments are lower during this timeframe. These initial rate periods usually span between 2 and 10 years, but longer and shorter ones are available.

After the introductory rates period has expired, the borrower will be placed onto their lender’s standard variable rate (SVR), which is nearly always higher, but this can be avoided by locking into a new deal, either with your current mortgage provider or a new lender.

When you are tied into a fixed-rate agreement, your mortgage rate cannot go up or down, so you are protected from sudden rates rises that lenders may be forced to introduce in times of economic uncertainty. There may, however, be restrictions while you are locked into a deal, such as a cap on the amount of mortgage overpayments you can make.

It can also be harder to make changes to your mortgage when fixed in, and in the event that you need to remortgage in this period, early repayment charges may apply.

How long can you fix in for?

Most lenders offer two, three and five-year fixed-rate deals as their standard offering, but a smaller number of deals with longer-term fixes (10 years plus) are available too.

At the time of writing (August 2024), the longest you can fix into a UK mortgage for is 30-40 years. If you need an introductory rate period of this length, you would be limited to a minority of specialist mortgage providers, but there are high street lenders offering lengthy fixes too.

At the other end of the spectrum, a few lenders are offering one-year fixes for borrowers who are planning for the short term, but these are largely limited to existing customers.

What happens when the introductory rate period ends?

Most mortgage lenders contact their customers at least six months before a fixed-rate period is due to expire to give them the option to lock into a new deal. If you don’t enter a new deal, either with your lender or a new one, you will be placed on your current lender’s SVR.

If you end up on an SVR, your mortgage repayments will likely be higher than before, or than if you were to fix back in. You would, however, have the flexibility to make uncapped overpayments or pay off your mortgage in its entirety without early repayment charges.

Options to consider

When you are reaching the end of a fixed-rate period, you have the following options:

• Renew your mortgage with your current lender
• Agree a new deal with a different lender
• Revert onto your lender’s standard variable rate

If you choose to enter a new deal, it doesn’t have to be another fixed rate. You could consider a different product type, the most common alternative being variable-rate mortgages. 

You can make other changes to your mortgage too, such as moving from a capital repayment agreement to an interest-only mortgage, or vice versa.

Since there are a number of options available and a vast market of fixed-rate and variable mortgages to choose from, it is a good idea to speak to a mortgage broker if you’re nearing the end of an introductory rate period. They can go through your options with, offer bespoke advice about which one to choose, and could even land you an exclusive interest rate.

What is the best fixed-rate mortgage deal right now?

Although the average rate on a two and five-year fixed rate mortgages remains above 5% (according to moneyfacts), it is possible to secure a rate of under 4.5% with a healthy deposit.

The ‘best’ or ‘cheapest’ fixed-rate mortgage deal won’t be the same for everyone. Lenders will assess what kind of deal you qualify for based on the amount of deposit you have (loan-to-value ratio), your credit history and the type of fixed-rate mortgage product you choose.

At the time of writing, the average interest rate on a fixed-rate mortgage is on the way down, having hit a peak in the wake of the UK Government’s Mini-Budget in September 2022.

You can boost your chances of securing a cheap fixed-rate mortgage by doing the following:

• Save up extra deposit: The best deals tend to kick in at around 60% loan-to-value (LTV), but the more deposit you can put down, the better.
• Research different product types: Deals with a shorter fix tend to come with lower rates, but it’s important to take out a mortgage product that fits your needs. Deals with an upfront product fee also tend to have a lower rate than fee-free mortgages.
• Optimise your credit reports: You can review your credit reports by signing up for a free trial on Checkmyfile. Identifying and reporting errors or outdated information can boost your credit score and help you qualify for a better fixed-rate mortgage deal.
• Speak to a mortgage broker: They can offer bespoke advice about how to get the best rate on a fixed-rate mortgage deal that fits your needs, and often have access to exclusive rates from mortgage lenders that aren’t accessible to the general public.

How to compare fixed-rate mortgage deals

You can compare fixed-rate mortgage deals yourself for free on Teito. Our service lists products from across the entire market for you to choose from in real-time.

Through Teito, you can…

• Compare the deals across 2, 3, 5 and longer-term fixes
• Assess how fixed-rate mortgages compare to variable deals
• Browse remortgage deals, both fixed and variable
• Secure an agreement in principle in minutes

Once you have selected a deal that fits your needs, one of our whole-of-market mortgage advisors will be on hand to make sure you are getting the best deal. They will also oversee your application for an agreement in principle to ensure it goes smoothly and quickly. 

You can access bespoke advice from our expert mortgage advisers at any point in the process, as they always offer a free, no-obligation chat to kick things off - but if your preference is to source a fixed-rate mortgage yourself, you can select that option below:

Compare fixed-rate mortgage deals for FREE

Choose Your Own Mortgage Speak To An Adviser

Which lenders offer fixed-rate mortgages?

All UK mortgage lenders offer fixed-rate mortgages as this is the most common product type in the country. Some providers, however, have a wider range of deals available than others.

Below you will find examples of the kind of fixed-rate mortgages UK lenders offer:

• HSBC: Offers a wide range of 2, 3 and 5-year fixed-rate mortgages, but its 10-year fixed-rate deals are exclusive to remortgages and existing customers.
• Nationwide: Has a wide range of 2, 3, 5 and 10-year fixed-rate mortgages. Offers 10-year fixes to first-time buyers as well as remortgage customers.
• Natwest: Fixed-rate mortgage product range is dominated by 2 and 5-year fixes.
• Halifax: Fixed-rate mortgage range comes with 2, 5 or 10-year introductory rates period. Some remortgage deals include the option of a three-year fix.
• Kensington: As well as offering standard fixed-rate term lengths, Kensington is one of the few lenders that offers up to 40-year fixes. The lender’s ‘Flexi Fixed For Term’ deals come with introductory rates periods of between 11 and 40 years.
• Santander: Offers a range of 2, 3 and 5-year fixes.
• Barclays: One of the few lenders offering 1-year fixes (existing customers only), as well as 2, 3, 5 and 10-year fixes plus 2-year trackers.

The above is merely a snapshot of the fixed-rate mortgage market, presented for example purposes. You can browse rates and deals from these lenders and more for free on Teito.

All of the product information here was accurate at the time of writing (August 2024)

Calculate the repayments on your mortgage

If you have seen a fixed-rate mortgage deal you like the look of, either on Teito or elsewhere, you can get an idea of what the repayments for it will look like by using our calculator below.

Simply enter the interest rate listed for the deal, along with the amount you need to borrow and a term length, and our calculator will take care of the rest.

Alternatives to consider

The main alternatives to fixed-rate mortgages are the different types of variable-rate mortgages available, namely tracker mortgages and discount rate mortgages.

• Tracker mortgages: With a tracker mortgage, the interest rate you pay each month is tied to an external marker, usually the Bank of England’s base rate. The rate payable can move up and down in line with this marker during the term, and is usually a fraction of a percentage point higher. Tracker mortgage interest rates are charged this way during their introductory rates period (typically two years) before they revert to an SVR.
• Discount rate mortgages: These are similar to a fixed-rate mortgage as they come with a locked-in discounted rate period that is typically two or three years long before reverting to an standard variable rate. The initial rate you will pay is a set reduction on the lender’s SVR. As the SVR can change at any point during the term, your monthly repayments can still vary even when you’re fixed in, but they will always be lower than the SVR.

If you are a remortgage borrower, rather than a homebuyer, the other alternative to agreeing another fixed-rate mortgage is dropping onto the lender’s SVR. This isn’t something that should be done lightly, but some people consider it temporarily if they want to make unlimited overpayments, or use this option if they are in a position to clear all of their mortgage balance.

Advantages and disadvantages

The table below highlights the main pros and cons of fixed-rate mortgages to help you decide whether this is the right option for your needs and circumstances.

Compare fixed-rate buy-to-let mortgages

Fixed-rate buy-to-let mortgages are widely available in the UK and are the most popular type among landlords. They work in exactly the same way as fixed-rate residential mortgages, but the introductory rates periods can be around a full percentage point higher, on average.

You can use Teito to compare fixed-rate buy-to-let mortgages online for free. Get started here and select the ‘Rent it Out’ option in response to the question about how you intend to use the property. You can compare rates for buy-to-let remortgages as well as purchases.

One of our expert buy-to-let mortgage brokers will be on hand if you need support, and will check over your case to ensure you are getting the best rate and most suitable terms.

Why choose Teito for your fixed-rate mortgage?

You can compare deals on fixed-rate mortgages, remortgages and buy-to-let mortgages for free on Teito, and access support from a broker who specialises in these areas.

Here are just some of the reasons people choose us to source their fixed-rate mortgages:

• Exclusive fixed-rate mortgage deals are available
• Our mortgage brokers are whole-of-market
• We are five-star rated on leading review websites
• It takes just minutes to secure an agreement in principle

Ready to compare fixed-rate mortgage deals online and take advantage of a free, no-obligation chat with one of our mortgage brokers? Get started here.