When it comes to securing a mortgage, one of the most important decisions you’ll make is whether to choose a fixed or variable rate. With interest rates continuing to fluctuate in 2025, understanding the differences between these two options is essential to ensure you’re making the right choice for your financial situation.

Fixed-rate mortgages: stability and predictability
A fixed-rate mortgage offers the security of knowing exactly how much your monthly repayments will be for a set period, usually between two and five years. This predictability can be particularly reassuring for first-time buyers or those on a tight budget. If you prefer stability and peace of mind, a fixed-rate mortgage can help you avoid any unexpected rises in interest rates. The downside is that fixed rates can sometimes be higher than variable rates, and if interest rates fall during your fixed period, you may end up paying more than you would on a variable mortgage.

Variable-rate mortgages: flexibility with potential risks
On the other hand, a variable-rate mortgage can offer flexibility. The interest rate on a variable mortgage can change, depending on the lender’s rates or the Bank of England’s base rate. This means you could benefit from lower rates if the base rate decreases, which can result in lower monthly repayments. However, the main risk is that if interest rates rise, your payments will increase too, which can make budgeting more difficult. Variable mortgages are often ideal for borrowers who can manage the potential fluctuation in payments or those who are planning to pay off their mortgage sooner rather than later.

Choosing the right mortgage for you
Ultimately, choosing between a fixed or variable rate depends on your personal financial situation and your tolerance for risk. If you prefer predictability and stability, a fixed-rate mortgage is likely the right choice for you. However, if you’re willing to take on a little more risk for the chance of lower payments, a variable-rate mortgage could offer more flexibility.

Need help choosing the right mortgage? If you're unsure which mortgage option is best for you, get in touch with us today for expert advice tailored to your needs.