Fix or Track? Why the Cheapest Mortgage Rate Right Now Isn't a Fixed Rate

The lowest mortgage rate available in the UK today is a tracker at 3.99%. Every fixed rate on the market is more expensive.

That doesn't happen often. And it's changed the question people are asking me.

For the past two years, almost everyone wanted to fix. Now, for the first time in a while, tracking is genuinely worth a look — for some people. Here's how to work out whether you're one of them.

Where the market actually stands

The Bank of England base rate has been 3.75% for five meetings in a row. The next decision comes on 17 September.

What's more interesting is the split on the committee. At the last meeting, three of the nine members voted to raise rates, not cut them. Inflation has climbed back to 2.9% against a 2% target, and the Bank expects it to rise further as higher energy costs work through the system.

Translation: the market's assumption that rates only go one way from here has weakened considerably.

Where the market sits, 1 September 2026

Bank of England base rate: 3.75% — unchanged for five meetings running. Next decision: 17 September.

Best 2-year tracker: 3.99% (Barclays, 60% LTV). Best 2-year fix: 4.32% (Danske Bank, 60% LTV).

Average 2-year fix: 5.63%. Average 5-year fix: 5.64%. Average lender SVR: just under 7.35%.

Inflation: 2.9%, against a 2% target.

What a tracker actually gives you

A tracker mortgage follows the Bank of England base rate, usually at a set margin above it. When base rate moves, your payment moves.

The upside: it's cheaper today — currently by around 0.33% against the best two-year fix. And most trackers carry no early repayment charge, which means you can usually move onto a fixed deal later without paying a penalty.

The downside: your payment isn't guaranteed. If the Bank raises rates, your monthly cost rises with it. Given that three committee members have just voted for exactly that, this isn't a theoretical risk.

What a fixed rate actually gives you

A fix locks your monthly payment for the length of the deal. You know the number. It doesn't move.

The upside: certainty. If rates rise, you're insulated. For anyone on a tight monthly budget, or with young children, or self-employed with variable income, that predictability is often worth more than the headline saving.

The downside: you pay a small premium for it, and if rates fall you're committed until your deal ends — or you pay an early repayment charge to get out.

So which one suits you?

•    A tracker may suit you if you have headroom in your monthly budget, you're comfortable with some movement, and you'd like the flexibility to switch to a fix later without a penalty.

•    A fix may suit you if your budget is tight, you value knowing exactly what leaves your account each month, or you simply don't want to think about it again for a few years.

There's no universally right answer. Anyone who tells you otherwise is selling something.

The gap most people never see

Here's the figure that matters more than the fix-versus-tracker debate.

The average two-year fixed rate in the UK is 5.63%. The best two-year fixed rate is 4.32%.

That's a gap of more than 1.3 percentage points. On a £250,000 repayment mortgage, it works out at roughly £180 a month — more than £2,100 a year.

That difference comes down to loan-to-value, credit profile, income type and individual lender criteria. Some of those things you can improve before you apply. Most people never find out which ones.

And if you do nothing at all

If your deal ends and you don't act, your lender moves you onto its standard variable rate. The average SVR is currently just under 7.35%.

Against a best-buy fix at 4.32%, that's a very expensive way to be busy.

What to do next

•    Deal ending in the next six months? Secure a rate now and keep it under review — you can usually switch if something better appears before completion.

•    Already on an SVR? Look at your options this week rather than next quarter.

•    Considering a tracker? Work out what your payment looks like if base rate went up by 0.25% or 0.50%. If that number worries you, a fix is probably the better fit.

•    Buying your first home? Get your borrowing figure confirmed before you start making offers.

Let's talk it through

Every one of these decisions gets easier once someone runs the numbers on your actual situation rather than the market average.

Book a free, no-obligation initial call and I'll do exactly that — fix versus tracker, your real figures, and a straight answer on what I'd do in your position.