If you’re coming to the end of a fixed-rate deal this year, you’re probably doing what most people do: checking the headlines, watching the Bank of England announcements and wondering which way mortgage rates are heading.
The honest answer is that nobody knows for certain. What we do know is that the fixed vs variable mortgage decision looks very different in 2026 than it has for some time, so it’s worth taking a step back and looking at what each option could mean for you.
What Happened at the June 2026 Bank of England Decision?
On 18 June 2026, the Bank of England held the base rate at 3.75% for the fourth consecutive time. The vote was 7-2 in favour of holding, with two members voting for an increase to 4%.
That split is worth paying attention to because it shows there’s still uncertainty about where interest rates could go next. Inflation has proved more stubborn than many expected, so the Bank of England is taking a cautious approach. The next interest rate decision is due on 30 July 2026.
For anyone looking at remortgaging, though, the more immediate story is what’s been happening to fixed-rate mortgage deals. Even though the base rate hasn’t changed, lenders have been reducing many of their fixed-rate products. Nationwide, HSBC, NatWest and TSB have all cut selected deals in recent weeks. Average fixed rates fell at their fastest monthly pace since October 2024 during June, and a growing number of lenders are now offering rates below 4% for borrowers with larger deposits.
It’s also worth remembering that fixed-rate mortgage deals don’t always move in step with the Bank of England base rate. Lenders also look at what they expect to happen in the wider economy over the coming months and years, which is why fixed rates can sometimes fall even when the base rate stays the same.
Where Do Fixed-Rate Mortgage Rates Stand Right Now?
As things stand in mid-July 2026, the cheapest two-year fixed-rate deals are sitting around 4.55%, although borrowers with larger deposits are beginning to access rates below 4%. Five-year fixes are priced very similarly too, with the gap between two and five-year products sitting at around 0.10%.
Tracker mortgage rates are currently lower. The cheapest two-year tracker products are around 3.96%, which could mean a noticeable saving on your monthly mortgage payments compared with a fixed-rate deal.
On a £250,000 repayment mortgage over 20 years, the difference between a tracker at 3.96% and a fixed rate at 4.55% is roughly £78 per month. Over a two-year period, that’s close to £1,900 back in your pocket – money that could go towards family holidays, home improvements or simply give you a little more breathing room each month.
The Case for a Fixed-Rate Mortgage in 2026
A fixed-rate mortgage gives you certainty. Your monthly payment stays the same regardless of what happens at the next Bank of England meeting or any announcement during your fixed period.
Right now, that certainty can be incredibly valuable. Two members of the Bank of England have already voted for higher interest rates. If inflation doesn’t continue to ease, rates could rise again. Choosing a fixed-rate mortgage protects you from any unexpected increases during your deal.
If you’re budgeting carefully, planning a family or simply don’t want to worry about what happens every time the Bank of England meets, knowing exactly what your mortgage payment will be each month can offer real peace of mind.
Fixed-rate mortgages can also appeal to borrowers who are further into their mortgage term, where even relatively small payment increases can make a noticeable difference to monthly finances.
The Case for a Tracker Mortgage in 2026
A tracker mortgage follows the Bank of England base rate, usually with a fixed percentage added by your lender. If the base rate falls, your mortgage payments fall too.
When weighing up a fixed vs variable mortgage, the gap between today’s fixed and tracker rates is one of the biggest things to consider. Tracker mortgages currently offer lower starting rates than many fixed deals.
It’s no surprise that more borrowers have started looking at tracker mortgages this year. Applications for tracker products tripled in April 2026 compared with the previous month, as people looked to benefit from lower starting rates and greater flexibility.
Another big advantage is that many tracker mortgages don’t charge early repayment fees. Lenders including Nationwide and Halifax offer tracker products that you can leave without penalty. That means if interest rates start falling again, or a better fixed-rate deal becomes available, you could switch without paying an early repayment charge.
A tracker could be a good option if you’re comfortable with your monthly payments changing and you’ve got enough flexibility in your budget to cope if rates rise.
How to Think About the Decision
In reality, choosing between a fixed and tracker mortgage isn’t about trying to predict the future. It’s about choosing the option that lets you sleep better at night.
Ask yourself one simple question: what would happen if my monthly mortgage payment increased?
If a higher payment would put pressure on your finances, paying a little more for the certainty of a fixed rate could be the better option.
If you’ve got some breathing room in your budget and you’re comfortable with your payments going up or down, a tracker is definitely worth considering, especially given today’s pricing.
It’s also worth remembering that lenders have been reducing many of their fixed-rate deals as competition for remortgage customers increases. If you’ve found a deal you’re happy with, there’s something to be said for securing today’s rates rather than trying to time the market perfectly. If inflation picks up again or the Bank of England changes its approach, mortgage deals could become more expensive again.
Frequently Asked Questions
Will fixed-rate mortgage rates fall further in 2026?
They’ve been coming down in recent months as lenders compete for remortgage business. Nobody can say for certain what will happen next. Future inflation figures and Bank of England decisions will influence where rates go from here. Waiting for a lower rate could pay off, but it could just as easily mean missing today’s deals.
What’s the difference between a fixed and variable mortgage?
A fixed-rate mortgage locks your interest rate for a set period, usually two or five years. A variable or tracker mortgage moves in line with the Bank of England base rate, meaning your monthly payment can go up or down over time.
Is a tracker mortgage risky right now?
A tracker comes with more uncertainty than a fixed-rate deal because your payments can change if the Bank of England changes interest rates. Whether that’s a risk worth taking depends on your budget and how comfortable you are with your monthly payments changing.
Can I switch from a tracker to a fixed rate later?
Many tracker mortgages don’t have early repayment charges, so the answer is often yes. If interest rates rise or a more attractive fixed-rate deal becomes available, you may be able to switch without paying a penalty. As always, it’s worth checking the terms of your mortgage before making a decision.
Need Help Deciding?
At AS Financial, we help people across the UK cut through the noise and choose a mortgage that’s right for them, not just today’s headlines. Whether you’re leaning towards a fixed rate or wondering if a tracker could work for you, we’ll talk you through your options, answer any questions you’ve got and help you make a decision with confidence.
If your current mortgage deal is ending within the next six months, now’s a great time to start exploring your options rather than waiting to see what happens at the next Bank of England announcement.
No pressure. No jargon. Just straightforward advice that’s tailored to you.
