The main differences
A fixed rate gives a known interest rate for a stated initial period. A tracker normally follows Bank Rate plus or minus a stated margin, so its rate and payment can change. An SVR is set by the lender, while a discounted rate is a temporary discount from that SVR. After an introductory deal, a mortgage may move to SVR unless you arrange another deal. Compare rate, fees, LTV and payment risk.
There is no universally best choice. Compare the rate, fees, early-repayment conditions, remaining balance, term, loan-to-value (LTV), and how comfortably the household could manage a payment increase.
What Bank Rate does — and does not — tell you
The Bank of England’s official Bank Rate was 3.75% on 17 September 2026, according to its rate history (last changed 18 December 2025). Bank Rate is the rate paid on some reserves held at the Bank of England and influences other rates in the economy. It is not a mortgage quote.
For a tracker, the offer might be “Bank Rate + 0.50%”; at that Bank Rate the contractual rate would be 4.25%, subject to the lender’s terms. A fixed-rate lender prices future funding and risk, so its rate can move before or independently of a Bank Rate decision. An SVR is the lender’s own variable rate. Check the offer and illustration for the actual formula, floor, cap and change date.
The main rate types
Fixed rate
The interest rate is fixed for (for example) two or five years. That makes budgeting easier and protects against rises during the fixed period, but it does not guarantee a fixed payment forever: the mortgage may move to SVR when the deal ends. A fixed deal can have an early repayment charge (ERC), limits on overpayments, and a product fee. Do not describe an ERC as always 1–5%; the exact amount and permitted penalty-free payments are product-specific.
Tracker
A tracker follows a stated reference rate, commonly Bank Rate, plus or minus a margin. Payments can fall or rise as the reference rate changes. Confirm whether there is a collar/floor, how quickly the lender passes changes through, ERCs, and the term of the tracker. A tracker is not the same as an SVR: the tracker has a contractual reference-rate formula; the SVR is set by the lender.
Standard variable rate (SVR)
An SVR is the lender’s variable follow-on rate. It can change at the lender’s discretion and is not required to equal Bank Rate or move by the same amount. It may be higher than an introductory rate. Before the deal ends, check remortgage timing, affordability and any ERC; do not assume a new deal will be available.
Discounted variable rate
A discounted rate is a discount from the lender’s SVR for a stated period. If the SVR rises or falls, the discounted rate normally moves with it, subject to the product terms. A discount is not a guarantee that the rate is below every tracker or fixed deal. Compare the discounted rate, the underlying SVR, the discount expiry and fees.
LTV, fees and the real comparison
LTV is the mortgage balance divided by the property value. A lower LTV can open different products, but valuation, affordability, credit history and lender policy also matter. The LTV can change as the balance is repaid or the property value changes; do not assume an estimated value will be accepted.
Include product/arrangement fees, valuation and legal costs, broker fees where applicable, ERCs, exit fees and the cost of moving to a new deal. A lower headline rate with a £1,999 fee may cost more than a higher-rate fee-free product. APRC is a longer-term comparison indicator based on stated assumptions; it is not a personalised promise and does not make unlike products identical. Read the European Standardised Information Sheet or offer document and ask what is included.
Independently checked payment sensitivity
The table below is one labelled hypothetical, not a quote. It uses a £200,000 capital-and-interest balance, 25 years remaining, monthly payments, no fees, no insurance, no overpayments, and a rate unchanged for the whole calculation. It uses the standard repayment formula P × i × (1+i)^n / ((1+i)^n − 1), where P is balance, i is annual rate divided by 12, and n is 300 months. Actual lender rounding, rate changes and fees will differ.
| Hypothetical rate | Estimated monthly repayment | Difference from 3.75% |
|---|---|---|
| 3.75% | £1,028.26 | — |
| 4.25% | £1,083.48 | £55.22 |
| 4.75% | £1,140.23 | £111.97 |
| 5.75% | £1,258.21 | £229.95 |
For a fuller hypothetical comparison, over 24 months the 4.25% product’s scheduled payments plus a £1,999 fee are £28,002.43, leaving an estimated £190,620.17 balance; the 4.50% fee-free product’s scheduled payments are £26,679.96, leaving £190,935.22. These are cash outlays and illustrative balances, not “true cost”: interest, capital repaid, fee treatment, valuation, ERCs and the follow-on rate all matter. The calculations assume rates stay unchanged and fees are paid separately.
Use MoneyHelper’s mortgage repayment calculator for an estimate, then use the lender’s illustration for the actual product. Interest-only payments are different: they do not repay the capital.
A practical comparison checklist
- Record the balance, remaining term and realistic LTV.
- Compare the initial rate, reference-rate formula or fixed period, and follow-on SVR.
- Add every fee and likely ERC; ask whether a fee is added to the balance.
- Stress-test the budget at a higher rate and allow for household costs.
- Check overpayment limits, portability, payment-change timing and exit conditions.
- Start reviewing before the current deal ends, without assuming rates or approval will be available.
For general rate-option explanations, see MoneyHelper’s mortgage interest-rate options. If you are remortgaging, review the Scotland remortgage guide before a deal ends. Use the site’s mortgage quotes, credit check tool and book-a-meeting routes only as separately reviewed internal destinations; they are not evidence of a particular rate or approval. For an individual application, use regulated mortgage advice and the lender’s current illustration.