What is a fixed rate mortgage?

fa-homeowners ["Mortgages Explained"]
A fixed rate mortgage is a type of mortgage that gives a fixed interest rate for a set period. This means that even if the Bank of England base rate goes up or down, you will pay the same amount each month.

How does a fixed rate mortgage work?

A fixed rate mortgage means that the interest rate you pay stays the same for an agreed period. It’s “fixed” for a number of years.
Depending on who you get a mortgage with, fixed rate terms can be:
  • 2 years 
  • 3 years
  • 5 years
  • 7 years
  • 10 years.

Pros and cons of a fixed rate mortgage

As with any kind of mortgage, there are pros and cons to fixed rate mortgages.


  • Your repayments won’t change during the fixed rate period so you may find it easier to budget.
  • Your interest rate will stay the same, even if the base rate goes up.
  • You can often choose the length of your fixed rate mortgage deal.


  • You will miss out on falling interest rates.
  • You may have to pay a fee if you want to exit your fixed rate deal early.
  • There may be a limit to how much you can overpay on your mortgage.

What happens when my fixed rate mortgage ends?

When your fixed rate mortgage comes to an end you can choose to switch to a new mortgage deal. 

The interest rate on your new deal will depend on what’s happening with the economy and any changes to the Bank of England base rate.
  • If the base rate has gone up during the initial period, you may find that mortgage interest rates have gone up.
  • If the base rate has gone down, you may find mortgage interest rates have gone down.
If you don’t choose a new deal when your fixed rate mortgage ends, you will move onto a standard variable rate mortgage. This could be higher than a new mortgage deal. 

Can a fixed rate mortgage change?

The interest rate you pay on a fixed rate mortgage won’t change during your initial period, even if the Bank of England base rate goes up.

Other types of mortgages

There are lots of mortgage options available. Some types of mortgages include:
  • Tracker mortgages – a type of variable rate mortgage that follows the Bank of England base rate.
  • Standard variable rate (SVR) mortgages – a type of variable rate mortgage that the lender has set. The interest rate can rise and fall according to the base rate. These can be more expensive than fixed rate mortgages.
  • Interest only – with this type of mortgage, you only repay interest, not the amount borrowed. You pay the amount borrowed off at the end of the mortgage term. 
  • Offset mortgages – a type of mortgage where you link your savings to your mortgage, to reduce the amount of interest you owe.
The content on this page is for reference and is not financial advice.
For impartial financial advice, try MoneyHelper.