We’re a nation of fixers. More than 92% of borrowers chose fixed rate mortgages in the first three months of this year, giving themselves the reassurance of knowing exactly what their monthly repayments will be for a set period of time.
But with interest rates expectations changing over the course of 2026 and the outlook still uncertain, some borrowers are taking another look at tracker mortgages.
The attraction is easy to understand. Tracker rates are currently cheaper than fixes and, if rates fall further, a tracker rate could allow your monthly repayments to fall too. Depending on the type of tracker you choose, you may also have the flexibility to switch to a fixed rate mortgage later if the timing feels right.
So how do you decide?
Fixed rates: safe and secure
More than nine out of 10 borrowers still fix because it offers payment security.
A fixed rate does exactly what it says on the tin. Your interest rate stays the same for an agreed period, usually two or five years, but it can be up to 10 or even 40 years with some providers. This year’s winner of the Your Mortgage Award for Best First-Time Buyer Lender, Nationwide, offers two-, three-, five- and 10-year fixed rate options.
No matter what happens to wider interest rates, your pay rate won’t budge for the length of that deal.
Knowing exactly what your mortgage payment will be each month for an agreed period makes budgeting easier, which can be important if you’re buying your first home, don’t have a lot of financial wiggle room, or just want the certainty of fixed household bills.
The trade-off is that, if wider interest rates fall, you won’t benefit until your fixed deal comes to an end, unless you’re prepared to pay an early repayment charge (ERC) to leave the deal early, which can be expensive.
Why some borrowers are considering trackers
Tracker mortgages work differently. Your pay rate moves up and down in line with the Bank of England base rate, plus a set percentage. For example, base rate plus one percentage point.
That means your monthly repayments will reduce if the base rate falls or increase if rates rise.
Some borrowers are comfortable with that uncertainty if they believe rates are more likely to fall than rise over the next few years, or they know they can afford it either way. Others like the additional flexibility some tracker mortgages offer.
For example, lifetime tracker mortgages don’t usually charge ERCs, making it easier to switch to another mortgage if your circumstances change or if fixed rates become more attractive. However, two-year and five-year tracker deals do usually carry ERCs.
One reason trackers have attracted more attention recently is that they’re currently cheaper than fixed rate mortgages on average. The average two-year fixed rate in June was 5.52%, according to Moneyfacts, compared with an average two-year tracker rate of 4.49%. For some borrowers, that lower starting rate, combined with the flexibility to switch to a fixed deal later, has made trackers a more attractive option.
There’s no right or wrong answer. It comes down to what suits your plans and how comfortable you are with uncertainty. Most lenders offer a wide choice of products that often includes both fixed and tracker rates, including Halifax (now Lloyds Bank), which won Best Overall Lender in this year’s Your Mortgage Awards.
Don’t focus on interest rates alone
It’s easy to get caught up trying to work out where interest rates might go next.
But forecasts change all the time. Inflation, economic data and events around the world all affect expectations, and even professional economists don’t always get it right. At the start of 2026, most experts were predicting two or three rate cuts this year, but expectations shifted in response to the conflict between the US and Iran.
Rather than trying to predict the perfect moment to fix, think about the type of mortgage that best suits your finances and your attitude to risk.
Ask yourself if you can afford a rise in your mortgage repayments in the next few years. If not, or if you want certainty, a fix could be worth considering.
But if you want the lowest possible rate with the flexibility to switch deals if rates or your circumstances change, a tracker (specifically a lifetime tracker with no ERCs) might be a possible option.
It’s also worth thinking about what happens when your initial deal ends. If you’re likely to stay with the same lender, does it offer a straightforward product transfer process? NatWest, this year’s winner of the Your Mortgage Award for Best Product Transfer Provider, makes it easy for existing borrowers to see what products are available with a personalised quote. You can then make the switch within 10 minutes online.
Which is right for you?
Fixed rate mortgages remain the choice for the vast majority of borrowers, and it’s easy to see why. They offer certainty at exactly the time when household budgets might be under pressure and they protect you from rate rises.
For some people, particularly those who value flexibility and are comfortable with movement in their monthly payments, trackers are still worth a look.
Whichever route you choose, make the decision based on your own circumstances rather than trying to outguess the market. The right mortgage for you is the one you’ll still feel comfortable with if interest rates don’t move in the way you expected.
