In developmentIn development by Marc Alexander
Picking a mortgage
The rate matters more than the lender's name. Here's what the words mean, how two years compares with five, and what to do when a deal ends.
A guide, not advice. A broker can look at your own case.
Checked 2026-10-03.
Your rate, and so your monthly payment, stays the same for the length of the deal: usually two or five years, sometimes three or ten.
That certainty is the point. Rates can rise and your payment won't. If rates fall, you don't benefit until the deal ends.
A tracker follows the Bank of England base rate plus a margin, so your payment can change a few times a year. A standard variable rate (SVR) is set by the lender and is usually the dearest of all.
Trackers can suit people who could take a rise in their stride. Most first-time buyers can't, and that's fine.
Shorter fixes are often a little cheaper now, but you'll need a new deal sooner, at whatever rates are then. Longer fixes cost a bit more now and keep the certainty for longer.
There's no right answer. It depends on how much a rise would hurt, and whether you might move within the fix. Leaving a fix early usually means an exit fee of a few percent of the loan.
Some deals have an arrangement fee, often £1,000 or so, in return for a lower rate. On a smaller loan, a no-fee deal with a slightly higher rate can work out cheaper overall.
The comparer below leaves fees out, so it's fair to compare the rates. Add any fee to the total yourself, or ask a broker to.
If you do nothing, you drop onto the lender's standard variable rate, which can be several points higher. Put a reminder in your calendar six months before the end date.
Lenders let you line up a new deal a few months early. You can switch with the same lender (a product transfer) or move to another one (a remortgage).
Most deals let you overpay up to 10% of the balance a year without a charge. Overpaying early in the mortgage saves the most interest, because it's when the balance is biggest.
Only do it with money you won't need back. A savings buffer for repairs and surprises comes first.
Many deals are broker-only, and a broker knows which lenders suit your job, deposit and credit. Many are free to you, paid by the lender. Ask how they're paid before you start.
Take the summary from a home's page with you. It has the figures they'll ask for.
Try it
Put in the rates you're offered, and a guess at where rates will be when the short fix ends. Over 30 years, from your homes page.
2 year fix, then 3 years at 5.5%
Paid over 5 years
£57,652
5 year fix
Paid over 5 years
£55,366
The 5 year fix comes out £2,286 cheaper over 5 years, if rates after the short one are 5.5%. The two meet if the rate after the 2 years is about 4.9%.
Fees are left out. Nobody knows where rates will be. A guide, not advice: a broker can look at your own case.
Try it
Deals with the lowest rates often charge a fee of around £1,000. Put in two deals and see what each really costs over the fix, fees and interest together.
Deal A comes out £77 cheaper over 2 years. Deal A would need a fee under about £1,080 to come out ahead.
“Cost” is the interest and fees over the fix: everything you pay, plus what's still owed at the end, minus what you borrowed. Fees matter most on smaller loans. Over 30 years, from your homes page. A guide, not advice.