Which Mortgage Fits You Best? Let’s Break It Down
Fixed rate or tracker, fixed rate or tracker, fixed rate or tracker? Is that what your brain sounds like right now?
It really can feel like trying to make an impossible decision, especially when rates are still shifting around and advice seems to change every second.
It all really depends on you, how long you plan on staying, how much flexibility you need and your feelings on the idea of rates going up and down.
So instead of throwing more jargon at you, let’s go through five simple questions to help you figure out which type of mortgage might suit you best.
1. Do You Want Certainty Over What You’ll Pay?
If you are the kind of person who likes to know exactly what to expect, fixed rates are your new best friend. The interest rate stays the same for a defined period of time (most likely two, five or ten years). This means no tricky surprises if the Bank of England makes a sudden move,
This can be exceptionally helpful for first-time buyers in particular, or anyone trying to budget carefully in today’s difficult cost-of-living climate. However, if interest rates drop, annoyingly, you won’t benefit; breaking a fixed deal early usually means paying early repayment charges (ERCs). For example, a typical two-year fix might have 2 % in the first year and 1 % in the second, but it can vary by lender.
Numbers example: On a £250,000 mortgage, a 3.99% fixed rate saves around £150 per month compared to 5.25%.
Tip: Ask about ERC bands before committing to anything.
2. Are You Comfortable With a Bit of Risk for Potential Savings?
Tracker mortgages move in line with the Bank of England base rate (plus a set margin), so your monthly payments can go up or down depending on what’s happening in the wider economy.
In February 2025, the first sub-4% fixed deals (e.g. Santander 3.99%) reappeared for low-LTV buyers. Meanwhile, tracker deals often start lower and may come with no exit penalties, which is useful if you want to switch when the time’s right.
“Switch-and-fix” strategy: Some buyers start on a tracker, then fix when rates fall or stability matters more.
But you’ve got to watch out for those base rate rises, because if they go up, so will your monthly payments.
3. Do You Think Rates Will Go Up or Down?
Absolutely no one can predict the future (unfortunately), but what we can do is look at current signals. As of May 2025, the Bank of England reduced the base rate to 4.25% following a hold at 4.5% in March.
Market consensus suggests modest rate cuts might follow, but inflation pressure could keep things sticky.
Your view on rates might shape your decision:
- Expecting more cuts? A tracker could save you money now.
- Prefer security? Fixing locks in your cost, regardless of market noise.
4. How Long Do You Plan to Stay Put?
Do you plan on sticking around for a while? That’s the kind of thing that will influence what mortgage would be best. Here’s how we think you should think about it:
- Short-term plans (1–3 years)
- A two-year fixed-rate deal gives you predictable payments with flexibility to remortgage soon.
- A tracker with no early repayment charge could work well if you’re planning to move or switch deals quickly.
- Medium-term plans (3–5 years)
- A five-year fixed rate might be the sweet spot. It locks in your payments while giving you a decent window before needing to review.
- Long-term commitment (5+ years)
- A ten-year fixed rate could offer a stress-free option, great if you’re settled and want to avoid going through the process again.
- Be mindful of early repayment charges if your circumstances do change.
Whichever route you go, flexibility matters. Think ahead, and choose a deal that fits the kind of life changes you’re expecting.
And now for the final question.
5. Do You Qualify for the Best Deals?
Whatever route you choose, the rate that you do get will depend on your circumstances, such as your credit score, your income, existing debt and deposit size. Lenders will look at all these factors.
Lenders have eased criteria in 2025, with Lloyds offering 5.5× income and Halifax introducing the “Boost” deposit support scheme.
If you have a 25%+ deposit, you’ll likely access the most competitive rates. But even with 5–10%, the government’s Mortgage Guarantee Scheme remains in place.
A Tip: Advisers often have access to exclusive broker-only deals, potentially much better than what’s available directly online.
Final Thoughts: Advice Beats Guesswork
There’s no one-size-fits-all answer when it comes to choosing between a fixed and tracker mortgage. It’s about what matters most to you: stability, flexibility, or the potential to save.
If you’re unsure, the best first step is a quick chat with an adviser who knows the full mortgage market and can run the numbers based on your situation. They can help you avoid overpaying, missing out, or locking into something that doesn’t quite fit.
Call 020 8366 4400 or email enquiries@cedarhfs.co.uk to speak to our mortgage team today.