Coming Off a Low Fixed Rate? When a Tracker Mortgage Could Be Worth Considering
Why I Recommended a Tracker Mortgage When Fixed Rates Were Higher
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The information contained within was correct at the time of publication but is subject to change.
29th October 2026
Five years ago, I helped this client buy their first home and arrange their first mortgage.
They're now in their 30s, established in their career and earning a strong income. With their five-year fixed rate coming to an end in 2027, they came back to me to start looking at what to do next.
On paper, this was a very straightforward remortgage. They have a good income, no credit concerns and plenty of equity in the property after owning it for the last five years.
The main decision was which type of mortgage would suit them best for the next couple of years: a fixed rate or a tracker.
Planning ahead before the fixed rate ends
The client's main objective was simple, they wanted to have their next mortgage arranged in plenty of time and avoid reaching the end of their current deal without a plan.
Because we started looking at things well in advance, we had plenty of time to discuss the different options and decide what would work best for them.
They also don't see their current property as their forever home. They're happy there for now, but expect they may move again in the next few years.
That meant flexibility was an important part of the conversation alongside the interest rate and monthly payment.
Fixed rate or tracker?
The client's previous mortgage was a five-year fixed rate, so naturally we looked at fixing again.
Fixed-rate mortgages offer the reassurance of knowing what interest rate you'll pay for an agreed period. For someone who values predictable monthly payments, or who would struggle financially if their mortgage payment increased, that certainty can be extremely valuable.
We also looked at tracker mortgages.
At the time we reviewed the market, there was a significant difference between the fixed and tracker rates available to this client, with the tracker considerably lower.
We therefore discussed whether taking advantage of the lower tracker rate was worth accepting the possibility of higher payments in the future.
A tracker mortgage normally follows the Bank of England base rate. If the base rate increases, the interest rate payable on the mortgage is likely to increase. If the base rate falls, the mortgage rate may fall too, depending on the terms of the product.
There is no way of knowing exactly what interest rates will do over the next couple of years, so the client's ability and willingness to cope with potential increases was a really important part of the decision.
Why a tracker suited this particular client
The client's financial position meant we could seriously consider taking some risk with the interest rate.
They have:
- A strong employed income
- Plenty of disposable income each month
- A good amount of equity in their home
- A good credit profile
- A good understanding of how variable interest rates work
- Enough room in their monthly budget to cope if the mortgage payment increases
We discussed how their payments could change if interest rates increased and the client was comfortable with that possibility.
If an increase in their mortgage payment could have put pressure on their monthly finances, the security offered by a fixed rate would have been much more important.
With this client, however, they had the financial headroom and appetite for risk to consider the lower tracker rate.
The flexibility to change later
Another really useful feature of the tracker we selected was that it didn't have an early repayment charge.
This gave the client additional flexibility.
If the mortgage market changes in the future, they can review their options again. Subject to the terms and availability of any new mortgage, they could potentially move from the tracker onto a fixed rate without having to pay an early repayment charge on their existing deal.
Of course, there's no guarantee that suitable or cheaper fixed rates will be available at that point.
For this client, though, having the option to review things again was valuable, particularly as they may also consider moving home in the next few years.
Could the tracker end up costing more?
Yes, and this was an important part of our conversation.
A tracker being cheaper at the point you take it out doesn't mean it will remain cheaper throughout the mortgage deal.
If interest rates rise, the client's mortgage rate and monthly payment could rise with them. Depending on how quickly and how far rates increase, they could ultimately pay more than they would have done by taking a fixed rate from the outset.
A fixed-rate mortgage offers certainty because your interest rate is secured for an agreed period, subject to the terms of the mortgage. However, fixed mortgages can also come with early repayment charges if you want to change or repay the mortgage during that period.
Fixed and tracker mortgages both have advantages and disadvantages, and the right choice depends on your circumstances, finances and attitude towards risk.
What did we decide?
After comparing the options and discussing the risks, I recommended a two-year tracker mortgage.
At the point we reviewed the market, this gave the client access to a lower interest rate than the fixed-rate alternatives available to them.
Their new mortgage payment will still be higher than the payment they have enjoyed on the low fixed rate they secured around five years ago, but choosing the tracker meant they didn't have to immediately commit to the higher fixed rates available at the time.
The lower starting rate was attractive, but the client's overall financial position was just as important when deciding whether a tracker was suitable.
They understood that their mortgage payments could rise and were comfortable with that risk. They also had enough disposable income to cope with an increase should rates move against them.
By sitting down and going through the different options, we were able to find a mortgage that suited both their current financial position and their plans for the next few years.
Coming to the end of your fixed rate?
If you secured a low fixed rate a few years ago, looking at today's mortgage market can come as a bit of a shock.
When your current deal comes to an end, it's worth considering all of the available options rather than automatically choosing the same type of mortgage again.
For some borrowers, the certainty of knowing exactly what they'll pay each month will make a fixed rate the obvious choice.
For others, particularly those with plenty of equity, disposable income and the ability to cope with changing monthly payments, a tracker mortgage could be worth considering.
The important thing is understanding the difference between the two, what could happen to your payments and how much risk you're comfortable taking.
If your fixed rate is coming to an end and you're wondering whether to fix again or consider a tracker, get in touch with Bristol Rose Mortgages and we can talk through the options to see what works for you.
Important information
Tracker mortgage rates are variable and can increase as well as decrease. If interest rates rise, your monthly mortgage payments could also increase.
Choosing a tracker mortgage could result in you paying more than you would have done with a fixed-rate mortgage, particularly if interest rates increase substantially or remain higher for longer than expected.
A fixed-rate mortgage provides certainty over your mortgage interest rate for the agreed fixed period, although early repayment charges may apply if you repay or change the mortgage during that period.
The most suitable mortgage will depend on your individual circumstances and attitude towards risk.
Your home may be repossessed if you do not keep up repayments on your mortgage.