Every rate type, in plain English.

The choice that matters most

Before comparing rate types, be clear about the decision underneath them: do you want certainty or flexibility? A fixed rate buys a payment that cannot move for its term. A tracker follows the Bank of England base rate and passes on both rises and falls. Discounted and capped deals sit between the two.

Contractors have a particular reason to value certainty, and it has nothing to do with guessing where rates go next. When earnings already rise and fall between engagements, pinning down the largest fixed outgoing is what makes the remainder of the household budget legible. That logic survives whatever the market subsequently does.

The gap that dwarfs the rest

Whatever you choose, the largest number in this section is the difference between any deal and the standard variable rate you roll onto when a deal ends. Set against it, the spread between one competitive lender and the next is close to noise.

Nothing ties you to it either — the tie-in expired with your deal — so this is simultaneously the cheapest correction available and the one that goes unmade most often. If your deal has ended, that is the decision to make before comparing anything else here.

What actually moves rates

Trackers are the only product tied mechanically to the Bank. Fixed pricing is built instead on swap rates: the cost to a lender of locking its own funding for a set period, which rises and falls on expectation rather than announcement. A fortnight of market repricing can therefore reshape the fixed deals on offer while the official rate sits perfectly still.

So reading "rates held" in a headline says almost nothing about what you could secure this week, and a keenly priced product may disappear before you have finished thinking about it. The underlying mechanics are in swap rates explained; the base rate and your mortgage works through what each product type does when the Bank moves.

What are the main UK mortgage rate types?

UK mortgages come in a handful of rate types: fixed (your rate is locked for a set period), tracker (it follows the Bank of England base rate plus a margin), discounted and capped (priced off the lender’s SVR, with or without a ceiling), offset (savings reduce the interest you pay) and the standard variable rate you revert to when a deal ends. Each behaves differently and suits a different priority.

Rate type	How the rate behaves	Early repayment charges	Tends to suit
Fixed	Locked for a set term (often 2–5 years)	Usually apply during the fixed period	Anyone wanting payment certainty
Tracker	Follows the BoE base rate plus a fixed margin	Sometimes — varies by product	Those comfortable with movement, or expecting falls
Discounted	A discount off the lender’s SVR; moves when the SVR moves	Usually apply during the discount period	Lower initial payments
Capped	Variable, but cannot rise above a set ceiling	Vary by product	Variability with downside protection
Offset	Fixed or variable, with savings offset against the balance	Vary by product	Contractors holding savings or tax reserves
SVR	The lender’s default rate, set at its discretion	Usually none	Generally best avoided — a deal is cheaper

Characteristics above are general; exact terms, including whether early repayment charges apply, depend on the individual product and lender and are confirmed at application.