Should I fix my mortgage?

fa-homebuyers ["Mortgages Explained"]
woman painting chair
“Fixing” means choosing a mortgage deal where the interest rate stays the same for a set amount of time. There’s lots to think about when deciding if your fix your mortgage or not. What you choose will depend on your financial circumstances.

Fixed or variable?

When you apply for a mortgage deal, you have lots of choices to make. One of the main decisions is choosing a fixed or variable mortgage: 
Fixed – a fixed rate of interest, that won’t change for a set period of time.
Variable – your interest rate can go up or down. This can mean more flexibility, but less stability in what you pay each month.

How long can I fix my mortgage for?

If you decide to fix, you’ll need to decide how long for. The options for how long a fixed rate mortgage deal lasts will depend on the lender you pick. Typically, you can fix your mortgage for:
2 years
3 years
5 years
10 years
A lender may offer a fixed rate deal that lasts for longer than 10 years, but these are less common.

What to think about when deciding to fix your mortgage

When you’re deciding to how long you’ll fix for (if you choose to), pay close attention to the cost for different deals.

For example:
You may want to fix for five or ten years, but this could mean being locked into a higher interest rate for the whole period of the deal.
If interest rates fall, your interest rate won’t fall if you’re on a fixed deal.
If interest rates go up, you won’t pay more during your deal.
When your fixed deal ends, it could mean that your monthly repayments go up if the base rate has changed during your deal.
Ultimately, you’ll need to decide what you’re more comfortable with and what suits your finances best.

What happens when a fixed deal ends?

When a fixed rate deal ends, if you haven’t arranged a new mortgage deal to replace it, you’ll be placed onto your lenders standard variable rate (SVR). This is the basic rate your lender offers without any discounts, and is often more expensive than a fixed rate deal.

When this happens, you can choose to stay on the SVR, or pick a new mortgage deal with your current lender or remortgage to a new one.

Pros and cons of fixing a mortgage

Benefits of fixing

You’ll know how much you will pay each month during your deal.
If the base rate rises and mortgage interest rates go up, your interest will stay the same for length of your deal.

Considerations of fixing

If the Bank of England base rate goes down, it could mean interest rates goes down. If you’re on a fixed you won’t save any money if this happens.
If interest rates go up during your fixed period, it could mean a sudden rise in your repayments when it ends.
The content on this page is for reference and is not financial advice.
For impartial financial advice, try MoneyHelper.