Secure a fixed-rate mortgage

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Secure a fixed-rate mortgage in the UK

Whether you’re a first-time buyer, considering remortgaging, or simply looking to understand your choices better, having clear, concise information is crucial. This guide aims to demystify one of the most popular types of home loans: fixed-rate mortgages.

Fixed-rate mortgages offer stability and predictability, making them a preferred choice for many UK homeowners. In this guide, we’ll explore the benefits and drawbacks of fixed-rate mortgages, compare them with other mortgage types, and address common concerns such as rising interest rates and remortgaging options. We’ll also provide answers to frequently asked questions, like how much you can borrow and whether you can make overpayments on a fixed-rate mortgage.

Whether you’re worried about interest rate fluctuations or trying to determine the best mortgage for your financial situation, this comprehensive guide will equip you with the knowledge you need to make an informed decision. Let’s dive in and explore how fixed-rate mortgages can help you achieve financial stability and peace of mind.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a type of home loan where the interest rate remains constant for a predetermined period, typically ranging from 2 to 10 years, though longer terms are available. This means your monthly mortgage payments will stay the same throughout the fixed period, regardless of changes in the broader interest rate environment. This stability allows for easier budgeting and financial planning, as you know exactly how much you’ll pay each month. After the fixed period ends, the mortgage usually reverts to a variable rate unless you arrange a new fixed-rate deal.

Learn more: What is a fixed rate mortgage?

How do fixed-rate mortgages work in the UK?

Fixed-rate mortgages in the UK work by locking in a set interest rate for a specific period, typically 2, 3, 5, or 10 years, though some lenders offer even longer terms. During this fixed period, your monthly mortgage payments remain constant, providing stability and predictability in your budgeting.

Here’s a step-by-step overview of how they work:

  1. Application and approval: You apply for a fixed-rate mortgage with a lender, providing necessary documents such as proof of income, credit history, and a deposit. The lender assesses your financial situation to determine eligibility.
  2. Choosing the term: You select a fixed-rate term that suits your needs. Shorter terms usually have lower interest rates but require refinancing sooner. Longer terms offer more extended stability but might come with higher rates.
  3. Interest rate lock: Once approved, the interest rate is locked in for the chosen term. This means that no matter how market interest rates fluctuate, your rate—and therefore your monthly payments—will not change during the fixed period.
  4. Consistent payments: Throughout the fixed term, you make regular monthly payments that include both interest and principal repayment. These payments remain the same each month, making it easier to manage your finances.
  5. End of fixed period: At the end of the fixed-rate period, your mortgage usually reverts to the lender’s standard variable rate (SVR), which can fluctuate with market conditions. Alternatively, you can remortgage to a new fixed-rate deal or another mortgage type.
  6. Early repayment charges: Be aware that fixed-rate mortgages often come with early repayment charges (ERCs) if you decide to pay off the mortgage or switch deals before the fixed term ends.

Fixed-rate mortgages provide peace of mind by protecting you from interest rate increases during the fixed period, making them a popular choice for those seeking financial predictability.

What are the eligibility criteria for fixed-rate mortgages?

The eligibility criteria for fixed-rate mortgages in the UK generally include several key factors that lenders consider to assess your ability to repay the loan. Here’s a detailed overview of what you typically need to qualify:

Credit score

Lenders look at your credit score to gauge your creditworthiness. A higher score improves your chances of getting approved and may help you secure a lower interest rate. Aim for a good to excellent credit rating.

Income and employment history

You need to provide proof of a stable income. Lenders usually require:

  • Recent payslips (usually the last 3 months).
  • Bank statements showing your salary deposits.
  • Tax returns if you’re self-employed (typically the last 2-3 years).

Deposit amount

A significant deposit increases your chances of approval. Generally, a minimum of 5-10% of the property’s value is required, but putting down 20% or more can help you secure better rates and terms.

Debt-to-income ratio

Lenders assess your debt-to-income (DTI) ratio to ensure you can manage your mortgage payments alongside your other financial obligations. A lower DTI ratio is preferred, typically below 40%.

Proof of identity and address

Standard identification documents are required, such as:

  • A valid passport or driving license.
  • Utility bills or bank statements to confirm your current address.

Employment status

Stable employment is crucial. If you’re employed, continuous employment in the same job or industry is advantageous. For self-employed individuals, lenders usually require proof of consistent earnings over a few years.

Affordability assessment

Lenders perform an affordability assessment to ensure you can afford the mortgage payments. This involves analysing your income, expenses, existing debts, and financial commitments.

Property valuation

The property you wish to buy must be valued to ensure it meets the lender’s criteria and is worth the loan amount requested.


There are often age-related criteria. You must be at least 18 years old to apply for a mortgage. Additionally, the mortgage term should typically end before you reach a certain age, often around 70-75 years old.

Residency status

Some lenders require you to be a UK resident or have permanent residency status. Non-UK residents may face stricter criteria or higher interest rates.

Meeting these criteria increases your likelihood of securing a fixed-rate mortgage, but individual lenders may have specific requirements or considerations. It’s advisable to check with the lender or consult a mortgage broker to understand the precise criteria applicable to your situation.

Fixed-rate mortgage term examples

Fixed-rate mortgage terms in the UK vary in length, offering borrowers flexibility based on their financial needs and preferences. Here are some common examples of fixed-rate mortgage terms and their typical features:

Two-year fixed-Rate mortgage

  • Interest rate: Generally lower compared to longer-term fixes.
  • Ideal for: Those who expect to move or refinance soon or want a lower initial rate.
  • Considerations: Will need to remortgage or switch products after two years, potentially incurring new fees and rates.

Three-year fixed-rate mortgage

  • Interest rate: Slightly higher than two-year fixes but still relatively low.
  • Ideal for: Borrowers seeking a balance between short-term flexibility and rate stability.
  • Considerations: Similar to the two-year fix, you’ll need to remortgage or switch products after three years.

Five-year fixed-rate mortgage

  • Interest rate: Mid-range, offering more stability with moderate rates.
  • Ideal for: Those looking for longer-term stability without committing to a very long-term fix.
  • Considerations: Provides peace of mind for a more extended period, but if interest rates fall, you won’t benefit from lower rates.

Ten-year fixed-rate mortgage

  • Interest rate: Higher than shorter terms but offers long-term stability.
  • Ideal for: Homeowners who plan to stay in their property for a long time and prefer financial predictability.
  • Considerations: Long-term commitment; early repayment charges (ERCs) can be significant if you decide to switch or repay early.

Fifteen-year fixed-rate mortgage

  • Interest rate: Higher than 10-year fixes but offers the longest available stability.
  • Ideal for: Those who are very certain they will stay in their home for a long time and want to lock in their payments for an extended period.
  • Considerations: Very long-term commitment with potentially high ERCs; limited availability in the UK market.

Other terms

  • Seven-year and eight-year fixed-rate mortgages: Occasionally available, providing a middle ground between five and ten-year terms.
  • Shorter fixed terms (e.g., 1 Year): Rare and generally used for specific financial strategies or bridging periods.

Choosing the right term

When selecting a fixed-rate mortgage term, consider your financial stability, future plans, and current interest rate environment. Shorter terms offer lower rates and flexibility but require more frequent refinancing. Longer terms provide extended stability at a higher rate and involve longer commitments.

Example scenarios

First-time buyers: Often opt for two or five-year fixed rates for initial stability while adjusting to homeownership.

Growing families: Might choose five or ten-year terms for long-term predictability as they settle into a family home.

Retirees: May prefer longer fixed terms to ensure stable payments throughout retirement.

By evaluating these examples and your personal circumstances, you can choose a fixed-rate mortgage term that best fits your needs and financial goals.

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What are the benefits of a fixed-rate mortgage in the UK?

Fixed-rate mortgages offer several benefits, making them a popular choice for UK homeowners. Here are the key advantages:

Payment stability

One of the primary benefits of a fixed-rate mortgage is the predictability it offers. Your interest rate and monthly mortgage payments remain constant for the duration of the fixed term, which makes it easier to budget and plan your finances.

Protection against interest rate increases

With a fixed-rate mortgage, you are insulated from potential rises in interest rates during the fixed period. If market rates go up, your payments stay the same, protecting you from higher costs.

Financial planning

Fixed-rate mortgages provide certainty, allowing you to accurately forecast your outgoings. This stability is especially beneficial for those with tight budgets or fixed incomes, as it eliminates the risk of fluctuating payments.

Peace of mind

Knowing that your mortgage payments won’t change can reduce financial stress and provide peace of mind. This can be particularly comforting during periods of economic uncertainty or market volatility.

Suitable for long-term planning

For those planning to stay in their home for several years, a fixed-rate mortgage ensures that housing costs remain stable, which is advantageous for long-term financial planning and stability.

No surprises

There are no unexpected changes in your mortgage costs, making it easier to manage other expenses and avoid financial surprises.

Potentially lower long-term costs

While initial rates on fixed-rate mortgages might be slightly higher than variable rates, they can be more cost-effective in the long run if interest rates rise significantly during your fixed period.

Variety of term lengths

Fixed-rate mortgages come in various terms (e.g., 2, 5, 10 years), allowing you to choose the one that best suits your financial situation and future plans. This flexibility helps you balance the need for stability with your financial goals.

Easier to qualify for

Lenders may be more willing to approve fixed-rate mortgages for borrowers with a solid financial history, as the predictable payments reduce the lender’s risk.

Resale and portability

Some fixed-rate mortgages can be portable, meaning you can transfer the mortgage to a new property if you move during the fixed period, maintaining your existing rate and terms.

What are the drawbacks of a fixed-rate mortgage in the UK?

While fixed-rate mortgages offer many benefits, there are also some potential drawbacks to consider. Here are the key disadvantages of a fixed-rate mortgage in the UK:

Higher initial interest rate

Fixed-rate mortgages often have higher initial interest rates compared to variable or tracker mortgages. This means your monthly payments might be higher at the start of your mortgage term.

Limited benefit from rate drops

If market interest rates fall, your fixed-rate mortgage payments remain the same. You won’t benefit from lower rates, potentially paying more than you would with a variable-rate mortgage.

Early repayment charges (ERCs)

Fixed-rate mortgages typically come with early repayment charges if you decide to pay off the mortgage or switch to a different deal before the fixed term ends. These charges can be substantial and reduce the flexibility of your financial plans.

Long-term commitment

Longer fixed-rate periods (e.g., 10 or 15 years) lock you into a rate for an extended time. If your circumstances change, such as needing to move or refinance, you could face challenges due to ERCs and market conditions.

Potentially higher overall costs

While fixed-rate mortgages protect against rising interest rates, they may result in higher overall costs if interest rates remain low or decrease during your fixed period.

Less flexibility

Fixed-rate mortgages offer less flexibility compared to variable-rate mortgages. You are locked into a specific payment amount and schedule, which might not suit everyone, especially if your income is variable or you anticipate significant financial changes.

Higher fees

Some fixed-rate mortgages come with higher arrangement fees or other upfront costs compared to variable-rate mortgages. These additional costs should be factored into your decision-making process.

Difficulty in switching deals

Switching from a fixed-rate mortgage to another mortgage product can be challenging due to ERCs and the potential for higher fees or less favourable terms.

Portability issues

While some fixed-rate mortgages are portable (allowing you to transfer the mortgage to a new property), not all are. If your mortgage isn’t portable, moving home during the fixed period could incur additional costs and complications.

Rate vs. Inflation

If inflation rates rise significantly and your income does not keep pace, the fixed payment might become more burdensome over time, reducing your purchasing power.

What documents do I need to apply for a fixed-rate mortgage in the UK?

Applying for a fixed-rate mortgage in the UK requires several key documents to verify your identity, income, and financial status. Here’s a comprehensive list of the documents you typically need:

Proof of identity

  • Passport or driving licence: These documents confirm your identity and are standard requirements.

Proof of address

  • Utility bills (gas, electricity, water) dated within the last 3 months.
  • Bank statements showing your current address, also dated within the last 3 months.
  • Council tax bill for the current year.

Proof of income

  • Payslips: Usually, lenders require your last 3 months of payslips if you’re employed.
  • P60: The most recent P60 can also be required to show your annual income and tax paid.
  • Bank statements: Statements from the last 3-6 months to verify your income deposits.

Self-employed income proof

  • Tax returns (SA302): The last 2-3 years’ worth of tax returns are needed if you’re self-employed.
  • Accountant’s letter: Some lenders may require a letter from your accountant verifying your income.
  • Business accounts: Copies of your business accounts for the last 2-3 years.

Bank statements

  • Personal bank statements: Typically, the last 3-6 months of statements to review your financial activity and ensure you manage your finances responsibly.

Employment Details

  • Employment contract: A copy of your employment contract may be requested to confirm your job security.
  • Employer reference: Sometimes, a reference from your employer confirming your employment status and salary is needed.

Deposit proof

  • Savings account statements: Showing the funds you’ve saved for your deposit.
  • Gift letter: If your deposit is a gift, a letter from the donor confirming that the money is a gift and not a loan.

Credit commitments

  • Statements for loans and Credit cards: Details of any other credit commitments to assess your overall debt level and affordability.

Mortgage application form

  • Completed application form: The specific form provided by the lender, filled out with all necessary details.

Additional documents

  • Property details: Information about the property you intend to buy, such as the sales brochure or listing.
  • Proof of residency: If you are not a UK citizen, proof of residency or visa status may be required.

Having these documents prepared and organised can help streamline the mortgage application process, making it smoother and more efficient. It’s advisable to check with your specific lender or mortgage broker for any additional or specific requirements they might have.

Fixed-rate vs. variable-rate mortgages in the UK: Which is right for me?

Deciding between a fixed-rate and a variable-rate mortgage in the UK depends on your financial situation, risk tolerance, and future plans. Each type of mortgage has its distinct advantages and potential drawbacks, making it essential to consider your personal circumstances before making a decision.

Fixed-rate mortgages

Fixed-rate mortgages offer the benefit of predictability and stability. With a fixed-rate mortgage, your interest rate and monthly payments remain the same for a set period, usually between two and ten years, though longer terms are available. This stability allows for easier budgeting, as you know exactly what your repayments will be, regardless of fluctuations in the wider interest rate market. This can provide peace of mind, particularly during times of economic uncertainty or when interest rates are expected to rise. However, fixed-rate mortgages often come with higher initial interest rates compared to variable-rate options, and if interest rates fall, you won’t benefit from lower payments. Additionally, they usually include early repayment charges if you decide to switch deals or pay off your mortgage early.

Variable-rate mortgages

Variable-rate mortgages, on the other hand, come with interest rates that can change over time, typically in line with the Bank of England’s base rate or the lender’s standard variable rate (SVR). This means your monthly payments can go up or down. The primary advantage of a variable-rate mortgage is that the initial rates are often lower than fixed-rate mortgages, and if interest rates drop, your repayments will decrease accordingly. This can save you money over the term of the mortgage.

However, this also means that if interest rates rise, your payments could increase, potentially making budgeting more challenging. Variable-rate mortgages generally offer more flexibility, often with fewer or no early repayment charges, making them a suitable option for those who anticipate changes in their financial situation or who may want to make extra payments without penalties.

Which is right for you?

Choosing between a fixed-rate and a variable-rate mortgage depends on your financial priorities and risk appetite. If you value stability and want to protect yourself against potential interest rate hikes, a fixed-rate mortgage is likely the better choice. It’s ideal for those who prefer predictable monthly payments and long-term planning. Conversely, if you are comfortable with some level of risk and want to potentially benefit from lower payments if interest rates fall, a variable-rate mortgage might be more suitable. It offers flexibility and can be more cost-effective if the economic conditions remain favourable. Ultimately, it’s crucial to assess your financial goals, review market trends, and possibly consult a mortgage advisor to determine the best option for your specific needs.

What happens when my fixed-rate mortgage ends?

When your fixed-rate mortgage period ends, several things can happen, and it’s important to be prepared for the transition. Here’s what you need to know:

Reversion to standard variable Rate (SVR)

Typically, when your fixed-rate term ends, your mortgage will automatically switch to your lender’s Standard Variable Rate (SVR). The SVR is usually higher than the initial fixed rate and can fluctuate at the lender’s discretion, often in response to changes in the Bank of England’s base rate. This can lead to increased monthly payments and less predictability in your budget.


To avoid potentially higher payments on the SVR, many homeowners choose to remortgage. Remortgaging involves taking out a new mortgage, either with your current lender or a different one, to secure a better rate or different terms. This could mean switching to another fixed-rate deal, a tracker mortgage, or another type of mortgage product.

Steps to remortgage:

  • Review your options: Compare mortgage deals available on the market.
  • Apply for a new mortgage: Submit an application for a new mortgage that meets your needs.
  • Property valuation: The new lender may require a valuation of your property.
  • Legal process: Completing the legal paperwork and transferring the mortgage to the new lender.

Negotiating a new deal with your current lender

Another option is to negotiate a new deal directly with your current lender. Many lenders offer retention products designed to keep your business, which might include new fixed-rate or variable-rate deals. This process can sometimes be quicker and involve fewer fees than switching lenders.

Budgeting for higher payments

If you decide not to remortgage or negotiate a new deal, be prepared for the possibility of higher monthly payments if your mortgage switches to the SVR. It’s crucial to review your budget and ensure you can afford the potential increase in payments.

Early repayment charges

Before making any changes, check if your mortgage has early repayment charges (ERCs) that extend beyond the fixed term. Some mortgages have these charges that can apply if you switch deals within a certain period after the fixed term ends.

Planning ahead

It’s advisable to start considering your options a few months before your fixed-rate term ends. This gives you ample time to research, compare deals, and make an informed decision without feeling rushed. Consulting with a mortgage advisor can also help you navigate the options and find the best solution for your financial situation.

Benefits of mortgage brokers

Mortgage brokers can offer numerous benefits to homebuyers and those looking to refinance their mortgages. Here are some key advantages of using a mortgage broker:

Access to a wide range of lenders

Mortgage brokers have access to a broad network of lenders, including banks, building societies, and specialist lenders. This access allows them to offer a variety of mortgage products that you might not find on your own, increasing your chances of finding a suitable deal.

Expertise and advice

Brokers are mortgage specialists with in-depth knowledge of the market. They can provide expert advice tailored to your financial situation and needs, helping you understand different mortgage products and choose the most appropriate one.


Searching for a mortgage can be time-consuming. A mortgage broker handles the legwork for you, from comparing mortgage deals to managing the application process. This saves you significant time and effort.

Negotiating power

Brokers often have established relationships with lenders and can negotiate on your behalf. This can result in better terms, such as lower interest rates or reduced fees, which might not be available if you approach lenders directly.

Tailored solutions

A mortgage broker can offer personalised mortgage solutions based on your unique financial circumstances, whether you’re a first-time buyer, self-employed, or have a less-than-perfect credit history. They can help you find products that meet your specific needs.

Simplified application process

The mortgage application process can be complex and daunting. Brokers guide you through each step, helping you gather the necessary documents and ensuring your application is complete and accurate, which can speed up approval times.

Market insights

Brokers stay up-to-date with the latest market trends and lender criteria. Their insights can help you make informed decisions and avoid potential pitfalls, such as applying for a mortgage you’re unlikely to qualify for.

Fee transparency

Many brokers offer clear, upfront information about their fees. Some brokers are paid by the lender, meaning you might not have to pay them directly. It’s important to discuss fees at the outset to understand any costs involved.

Continued support

A good mortgage broker provides ongoing support, not just until your mortgage is approved but throughout the life of the loan. They can assist with remortgaging or finding better deals as your financial situation changes.

Enhanced credit approval chances

Brokers can help you understand and improve your credit profile to meet lender requirements. They know which lenders are more likely to approve your application based on your financial situation, enhancing your chances of success.


Are fixed-rate mortgages good for first-time buyers?

Yes, fixed-rate mortgages can be a good option for first-time buyers. They offer predictable monthly payments, which can make budgeting easier and provide financial stability during the initial years of homeownership. This stability is particularly beneficial for first-time buyers who might be unfamiliar with the fluctuations in interest rates. However, it’s important to compare different mortgage options and consider your long-term plans and financial situation before deciding.

Is it a good idea to remortgage to a fixed-rate deal now?

Remortgaging to a fixed-rate deal can be a good idea, especially if you anticipate that interest rates will rise in the future. By securing a fixed rate, you lock in your monthly payments for a set period, providing protection against potential rate increases. However, it’s crucial to consider current fixed-rate offers, potential fees, and your financial goals. Consulting with a mortgage advisor can help you determine if remortgaging to a fixed-rate deal is the best option for you right now.

I'm worried about interest rates rising in the UK. Will a fixed-rate mortgage protect me?

Yes, a fixed-rate mortgage will protect you from rising interest rates in the UK. With a fixed-rate mortgage, your interest rate and monthly payments remain constant for the agreed-upon term, regardless of changes in the broader market. This stability ensures that your mortgage payments will not increase, providing peace of mind and making it easier to budget your finances.

How much can I borrow with a fixed-rate mortgage?

The amount you can borrow with a fixed-rate mortgage depends on several factors, including your income, credit score, existing debts, and the size of your deposit. Lenders typically use an affordability assessment to determine how much you can borrow, ensuring that your monthly payments are manageable based on your financial situation. Generally, lenders will offer a loan amount that is a multiple of your annual income, typically around 4 to 4.5 times your salary, but this can vary.

Can I make overpayments on a fixed-rate mortgage?

Yes, you can usually make overpayments on a fixed-rate mortgage, but there might be limitations and conditions. Many lenders allow overpayments of up to a certain percentage of the outstanding mortgage balance each year without incurring penalties, typically around 10%. Overpaying can help reduce the total interest paid and shorten the loan term. However, exceeding the overpayment limit can trigger early repayment charges (ERCs), so it’s important to check your mortgage agreement and consult with your lender before making additional payments.

Can you switch from a fixed-rate to a different mortgage type in the UK?

Yes, you can switch from a fixed-rate mortgage to a different mortgage type in the UK, but there are several factors to consider. Switching mortgages, also known as remortgaging, can help you take advantage of better interest rates or more suitable terms. However, if you switch before the end of your fixed-rate period, you may incur early repayment charges (ERCs). It’s essential to weigh these costs against the potential savings of a new mortgage deal. Consulting with a mortgage advisor can help you understand your options and make an informed decision about whether switching is beneficial for your situation.

What fees are associated with fixed-rate mortgages?

Fixed-rate mortgages come with various fees that you should be aware of when considering this type of loan. Common fees include:

1. Arrangement fee: Also known as a product fee, this is charged by the lender for setting up the mortgage. It can range from a few hundred to several thousand pounds.

2. Booking fee: A non-refundable fee to reserve the interest rate. This is typically payable upfront.

3. Valuation fee: Covers the cost of valuing the property to ensure it’s worth the loan amount.

4. Legal fees: Costs associated with the legal work required to transfer the property and set up the mortgage.

5. Broker fee: If you use a mortgage broker, they may charge a fee for their services.

6. Early repayment charges (ERCs): Fees applied if you pay off the mortgage or switch deals before the fixed term ends.
Understanding these fees is crucial for accurately comparing mortgage deals and assessing the true cost of a fixed-rate mortgage.

Are there early repayment charges on fixed-rate mortgages?

Yes, early repayment charges (ERCs) are common on fixed-rate mortgages. These charges apply if you decide to pay off your mortgage or switch to another mortgage deal before the end of the fixed-rate period. ERCs are usually calculated as a percentage of the outstanding loan amount or a set number of months’ interest. The specific terms and amounts can vary between lenders, so it’s important to review your mortgage agreement to understand the potential costs involved. ERCs are designed to compensate lenders for the interest they would have earned if the mortgage had remained in place for the full term.

Are there early repayment charges on fixed-rate mortgages?

Calculating the total cost of a fixed-rate mortgage involves considering several factors:

1. Interest payments: Multiply your monthly mortgage payment by the number of months in the fixed-rate period.

For example, if your monthly payment is £1,000 and your fixed term is 5 years (60 months), the total interest payments would be £1,000 x 60 = £60,000.

2. Principal Repayment: Add the portion of your monthly payment that goes toward repaying the principal amount of the loan.

3. Fees: Include all associated fees such as arrangement fees, booking fees, valuation fees, and legal fees.

4. Early Repayment Charges (if applicable): If you plan to repay early, include any ERCs in your total cost.

To get an accurate total, you can use a mortgage calculator or consult with your lender or mortgage advisor. By summing up these components, you’ll have a comprehensive view of the total cost of your fixed-rate mortgage over the term.

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