Fixed Rate Mortgages: The Pros & Cons

, by Matt Stevens

Taking the leap into a mortgage is a significant decision, one that warrants thorough research. With an abundance of options saturating the market, finding the perfect mortgage deal can feel like navigating a maze. The last thing anyone wants is to find themselves financially strained because their mortgage wasn’t tailored to their individual situation.

Among all the choices, however, two main types stand out: fixed-rate and variable-rate mortgages. In this article, our focus will be on the former, explaining what they are, how they work, and providing insights to help you assess their pros and cons.

What is a fixed-rate mortgage and how do they work?

In a fixed-rate mortgage, your interest rate stays the same for a predetermined period. This consistency ensures that your mortgage repayments remain unchanged, providing a clear understanding of what you’ll be paying each month.

Unlike variable-rate mortgages, where interest rates fluctuate, opting for a fixed rate offers stability. With no unexpected surprises in your mortgage statements, you thereby gain greater control over your monthly expenses and have a stronger sense of financial predictability.

The length of fixed-rate mortgages

The majority of lenders offer fixed-rate mortgage terms ranging from two to five years, although options for longer durations, such as seven to ten years or even more, are also available.

During the fixed-rate period, your mortgage payments remain unaffected by any interest rate hikes. However, if interest rates decline, securing a more favourable deal may entail early repayment charges, so it’s best to be certain about your choice before you make a decision.

What happens when the fixed rate ends?

If your fixed-rate term expires and you haven’t secured a new mortgage agreement, you'll be automatically placed onto your lender's standard variable rate (SVR).

SVR mortgages often prove to be less cost-effective and are subject to frequent fluctuations. As such, it's advisable to explore alternative options when this transition occurs, whether by switching mortgage providers or getting a product transfer.

Advantages of fixed-rate mortgages

  • Predictable budgeting: Consistent interest rates enable you to accurately budget, guaranteeing a steady monthly payment.

  • Long-term savings: Securing a low rate for an extended period can result in substantial savings over time.

  • Short-term flexibility: Opting for a brief fixed-rate term, such as two years, prevents overpayment in the case of future rate decreases.

  • Shielded from rate increases: Even amidst rising interest rates, your payments remain unaffected during the fixed-rate period, alleviating pressure on your monthly budget.

Disadvantages of fixed-rate mortgages

  • Early repayment charges: Exiting the fixed term prematurely typically incurs early repayment charges, which can prove costly, especially if a sizable mortgage balance remains outstanding.

  • Potential SVR shock: Failure to secure a new deal before the fixed term concludes may lead to unwelcome financial repercussions, as transitioning to the SVR could result in higher payments.

  • Risk of overpaying: Committing to an extended fixed-rate term risks overpayment if interest rates decline during this period, potentially leaving you paying more than necessary.

  • Overpayment restrictions: Many lenders impose a cap on overpayments for fixed-rate mortgages, often limiting excess payments to 10%, which could hinder efforts to pay off the mortgage faster.

How a broker can help you get the best fixed-rate mortgage deal

Securing the best fixed-rate mortgage involves more than just choosing a rate; it requires careful consideration of various factors. Once you've decided on a fixed rate, determining the term length and selecting a lender becomes crucial.

This is where our role as expert mortgage brokers shines. We assess your financial profile, addressing any concerns or red flags that could affect your application. By leveraging our extensive network and market insights, we match you with lenders offering competitive rates, including exclusive options not easily accessible independently.

Get Personalised Quote

Our proactive approach ensures your mortgage application stands out, increasing your chances of securing a favourable fixed-rate deal aligned with your preferences.

With years of experience, we at The Mortgage Genie specialise in tailoring fixed-rate mortgages to your unique circumstances. Contact us at 01915809890 to connect with a professional broker dedicated to your needs. And why not see how much you could borrow up to today by using our mortgage calculator?

Company Information

The Mortgage Genie Limited is Registered in England and Wales with Company Number 9803176. The Mortgage Genie Limited is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd. First Complete Ltd is authorised and regulated by the Financial Conduct Authority. Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority. The guidance contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.


Depending on the complexity of your mortgage there may be a fee for our mortgage advice and arrangement service, which will be discussed and agreed before you make a mortgage application. A typical fee is £293 and will never be more than 1% of the mortgage amount.