As we move into the second half of 2025, many people are wondering whether a fixed-rate or tracker mortgage is the best choice. With the Bank of England base rate now at 4.25% and another possible cut expected in August, lenders are adjusting their mortgage products—and this could create some interesting opportunities for buyers and homeowners alike.

So, which one is right for you?

What’s Happening with Mortgage Rates?

The current market is shifting and we’ve seen an uptick in activity. The base rate has already come down slightly this year, and some economists believe it could drop further before the end of summer. This has already led to a flurry of activity among lenders, who are beginning to reduce their fixed-rate deals. At the time of writing, two-year fixed mortgages are available from around 4.07%, while five-year deals are averaging about 4.58%. Some lenders, like Nationwide, are even offering two-year deals under 4%, depending on the deposit and credit profile.

Meanwhile, tracker mortgages are following the base rate as expected. The most competitive tracker products are now starting around 4.39%, and could offer further savings if the Bank of England continues to ease rates.

Fixed Mortgages: Stability and Peace of Mind

A fixed-rate mortgage gives you the reassurance of knowing exactly what your repayments will be for a set period of time. This can make budgeting a lot easier, especially if you’re working within a tight monthly budget. You’re protected if the base rate rises again, and many people like the predictability that comes with a fixed deal.

However, you won’t benefit if interest rates fall further, and there can be early repayment charges if you decide to change your mortgage or move house before the end of the fixed term. Some fixed-rate products also come with slightly higher upfront fees.

Tracker Mortgages: Flexibility and Potential Savings

Tracker mortgages tend to appeal to those who are a little more comfortable with market movement. Because these deals typically follow the Bank of England base rate, so your repayments can go down when the rate falls—which is something many experts think we’ll see again later this year. A tracker mortgage can offer real savings in a falling-rate environment.

That said, it also comes with some risk. If the base rate goes up, so do your monthly payments. It also means your costs could fluctuate from month to month, making it a little harder to plan your finances. Once the tracker deal ends, you’ll likely move onto the lenders standard variable rate which is likely to be higher—unless you remortgage in time.

Expert Opinion

Daniel Mumford, Managing Director at Grange Mortgages, believes that both options can be right depending on your personal situation. “With base-rate cuts expected in late summer, tracker mortgages offer flexibility—but fixed deals currently provide better value and payment certainty,” he says. “For most borrowers, especially those on tighter budgets, the peace of mind from a fixed deal often outweighs the potential savings trackers might bring. We generally see more of our customers looking for fixed-rate deals.”

How Do You Decide?

If you’re someone who needs predictability, a fixed-rate mortgage is likely the better fit. It makes it easier to budget and shields you from any future rate rises. On the other hand, if you think interest rates are going to continue falling and you’re comfortable with a little risk, a tracker mortgage might work well for you.

Some homeowners and buyers opt for a shorter two-year fixed deal, giving themselves flexibility to review things again in the near future. Others go for a five-year fix to lock in today’s lower rates and avoid having to remortgage more frequently. There’s also the option of choosing a tracker for now and switching to a fixed deal later, once rates have stabilised.

What’s Available Right Now?

At the moment, two-year fixed deals start at around 4.07%, with typical fees of about £1,495 for those with a 25% deposit. Five-year fixed deals are averaging closer to 4.58%. Tracker mortgages are priced from approximately 4.39%, and tend to come with lower fees. These deals are constantly changing, so it’s always a good idea to speak to a broker who can check the whole market and find something tailored to you.

Let’s Find the Right Deal for You

Whether you’re buying your first home, moving house, or thinking about remortgaging, now is a great time to review your options. At Grange Mortgages, we can help you understand how today’s rates affect your choices and find a product that fits your plans and lifestyle.

Get in touch with our team today to talk through your options. We’re here to help you make a confident and informed decision—whether that means locking in a fixed rate or making the most of a tracker deal.