The decision to fix your mortgage or stay variable depends on your budget's flexibility and your market outlook. The conflict in the Middle East has pushed up oil and gas prices, adding pressure to inflation expectations and causing financial markets to reassess how quickly rates might fall further, making the outlook for borrowers more uncertain than it appeared earlier in the year.
According to UK Finance, around 1.8 million fixed-rate mortgages are due to end in 2026 alone. Many of those homeowners locked in when typical fixed rates were closer to 2.5% and will now be remortgaging into a market where the lowest available five-year fixed rates sit around 4.48% in June 2026, according to HomeOwners Alliance data.
The average standard variable rate, which borrowers fall onto if they do nothing when their deal ends, currently averages around 7.27% according to Moneyfacts. Bank of England modelling suggests monthly repayments are projected to increase by around £64 a month on average for those remortgaging onto higher rates. Some households will see significantly larger increases depending on loan size, the rate previously held and timing.
The revision from 3.9 million to 5.2 million affected households reflects, among other factors, increased global economic uncertainty including energy market volatility linked to Middle East tensions, according to the Bank's April 2026 report.
Fixed-Rate Mortgage
With a fixed-rate mortgage, your interest rate is locked in for a specific period, such as 2, 5, or 10 years. During that time, your monthly mortgage payment remains unchanged. For example, if you fix your mortgage at 4.5% for five years, you will continue paying 4.5% even if market interest rates rise to 6% or fall to 3%.
Key benefits
- Predictable monthly payments.
- Easier budgeting.
- Protection from interest rate increases.
Potential drawbacks
- You won't benefit if rates fall.
- Fixed deals often come with early repayment charges if you want to leave the mortgage before the fixed period ends.
Variable-Rate Mortgage
With a variable-rate mortgage, the interest rate can rise or fall during the mortgage term. This means your monthly payments can also increase or decrease. There are different types of variable mortgages: tracker mortgages, which follow a benchmark rate such as the Bank of England base rate, and Standard Variable Rate (SVR) mortgages, where the lender can change the rate according to its own policies. For example, if your rate is 4% today and market rates rise, your mortgage rate could increase to 5% or more, resulting in higher monthly payments.
Key benefits
- You may pay less if interest rates fall.
- Some variable deals offer more flexibility.
Potential drawbacks
- Monthly payments can increase unexpectedly.
- Budgeting is less predictable.
Martin Lewis' assessment
On the question of going for a fixed-rate or variable, Martin explained: "A fixed rate is an insurance policy against hikes and therefore gives peace of mind. That has to be factored into the equation. Though how much that peace of mind costs you is important too. Yet a shock horror thought from the Money Saving Expert. Here, choosing a rate isn't purely about which is the cheapest."
Deciding whether to fix is a question of weighing up how important certainty that your repayments will stay the same is for you. I tend to think of this as a "how close to the edge are you?" question. Someone who can only just afford their mortgage repayments should not be gambling with interest rates. They'll benefit much more from a fixed rate as it means they'll never be pushed over the brink by a rate increase during the term of the fix. Those with lots of spare cash over and above the mortgage may choose to head for a discount or tracker, and take the gamble that it'll work out cheaper in the long run.
Yet if you do decide to go for a fixed rate on the basis of surety and later with hindsight realise a discount rate would've been cheaper, this doesn't mean it was the wrong decision. If you needed surety, remember, you got it. Even though the overall outcome wasn't what you wanted, you made the best decision based on the knowledge you had at the time.
