Fixed rates have dominated the UK mortgage market for years, as they’ve been historically low and offered payment security.

But all that has changed in 2022, and now average fixed rate mortgages are higher than typical tracker rates and discounted variable deals.

Average five-year fixed rates are 5.95% compared to 4.12% for average tracker deals, according to Moneyfacts.

Of course, you take a risk with a tracker or variable rate mortgage because the pay rate could rise. Although if you want to get the lowest monthly repayments now and are prepared to accept potentially higher future repayments, they could be an good option to consider.

If payment security is most important to you, only a fixed rate will give you that.

But what do mortgage advisers think?

Below is a round up of opinions from professional mortage brokers on fixed vs. variable rate mortgages in the current market.

Focus on fixed

Lloyd Dorrington of Finanze, said: “This is a question I am being asked a lot of late by clients compared to previous months. Personally, I wouldn’t advise tracker rates to our clients, especially at high LTVs both for buy-to-let and residential mortgages.

“They’re very unpredictable and in the case of buy to lets, the stress tests that the lender does to make sure the rent costs cover the mortgage are much higher on a variable product so might not fit on this basis.

“Also, some lenders have actually dropped their fixed rates recently after the huge increases we saw a couple of months ago, and so a fixed rate is more inviting given there are likely to be additional rate increases in the upcoming months or years.

“Also with a variable rate, when you then decide to switch onto a fixed rate there will be an additional broker fee, valuation fee, lender arrangement fee, solicitor fee and it can take three months to go through. As well as this, it can be harder to budget as you won’t know what your monthly payments are as these will change as the base rate changes, which they could be doing again in December. Although you may be able to afford the tracker payments today, this might not be the case once rates have risen, and you don’t have the stability that you would have with a fixed rate.”

Elliott Benson, owner and broker at Sett Mortgages, added: “I have seen an increase in enquiries from clients regarding tracker products recently due to the recent increases in fixed rates. However, so far I have seen very low numbers actually opting for them over a fix due to uncertainty and the preference to know exactly what they are going to be paying over the next two to five years.

“Trackers can provide savings at the moment and are worth considering, however given the base rate is forecast to increase once again, the general response I am seeing from clients is they would rather have the security of a fixed payment due to the rising cost of living and the sharp base rate rises we have just been through than risk their mortgage payments increasing along with their bills and food.

Lewis Shaw, owner at Riverside Mortgages, pointed out that borrowers are concerned about more than just the cheapest rate. He said: “Mortgages aren’t just about the maths. A tracker is no good if you can’t sleep at night because of the worry about what your mortgage payment might be in six months.

“Moreover, due to stress tests that lenders use when calculating affordability, most people can generally borrow more on a five-year fixed rate as the stress test is more lenient. So if someone is stretching their affordability, is a tracker a good idea? Probably not. If they need to borrow the maximum to get their dream home, they might not have a choice and be forced to go with a five-year fixed rate to get the loan needed. There’s more to it than meets the eye.”

Time for trackers?

Craig Fish, founder of Lodestone Mortgages & Protection, said: “I am not recommending fixed rates to anyone at present, unless they are completely risk averse, as I think there is still quite a bit of room for downwards momentum on these. I am expecting and hoping that fixed rates drop below 4% at some point in the New Year as lenders look to eat into their annual lending targets early.

“At this point I will likely start recommending fixed rates again, but until then it’s tracker and discounted variable rates, without early repayment charges, all the way, once we have fully assessed and tailored our advice to the client’s needs.”

Lea Karasavvas, managing director at Prolific Mortgage Finance, agreed: “While SWAP rates have been reducing in the past few weeks, and we are starting to see this filter through to the fixed rate products in the market, we are very much of the opinion that the best value is within trackers right now.

“Lenders are slowly starting to build an appetite for new business, and this should drive down the cost of borrowing in terms of fixed availability in the not-too-distant future. But for those that need to move now or are coming off their fixed rates in the near future, we are arguably seeing better value in trackers as the price differential is so high between the two.”

Ashley Thomas, director at Magni Finance, added: “I would seriously consider a tracker as the fixed rates are significantly higher. Even if the base rate increases as expected, it would take a substantial rise for the tracker to be higher than the fixed.”

Take advice

Of course, there is no best type of deal or best product to suit everyone.

The right mortgage for you depends on your finances, wider circumstances, goals and attitude to risk.

If you aren’t sure, find a mortgage broker who will give you regulated, expert advice tailored to your needs.