Advisers say the best deal is not always the cheapest but the one that fits the borrower’s plans
With mortgage pricing edging down from recent highs and many borrowers coming off pandemic-era fixes, the choice between fixed and variable rates has become more nuanced. For brokers on the front line, the decision is less about headline pricing and more about risk, flexibility and the structure that best fits a client’s plans.
Brokers report that the starting point is usually a client’s view of future interest rates, but tempered by how much volatility they can live with in practice. “If they believe rates are likely to fall or stay low, a variable rate can offer flexibility and potentially lower costs,” said Jade Pinkerton (pictured top right), senior mortgage and protection adviser at Oportfolio Mortgages. “If they’re worried about rates rising, fixing provides certainty and stability.”
That trade-off between potential savings and certainty is now playing out against a shifting backdrop. Pinkerton pointed to expectations that base rates will ease as economic conditions weaken, but noted that current pricing does not always reward borrowers for taking more risk. In her view, two-year fixed rates are often cheaper than comparable tracker products, while still giving borrowers the reassurance many now seek.
Pricing, however, is only one part of the calculation. Early repayment charges (ERCs), expected life events and property plans can be as decisive as the coupon itself. Borrowers who anticipate selling, upsizing or restructuring debt in the short term may favour variable products that either carry no ERCs or come with lighter penalties.
For some clients, the ability to overpay or exit early without major cost is central to the recommendation. Pinkerton highlighted that flexibility to repay beyond standard allowances, to sell within a couple of years, or to benefit quickly from any Bank of England base rate cuts can tilt the balance towards a variable option. Fixed rates, by contrast, tend to offer stronger payment protection but at the price of more restrictive ERC schedules.
Shazad Ahmed (pictured top left), director of elan property finance, described the core decision in similar terms. “The key factors influencing a borrower’s choice between a variable and fixed rate typically come down to stability, flexibility, and budgeting preferences,” he said. “A fixed rate offers certainty: the interest rate is locked in for a set term, usually two or five years, ensuring payments remain consistent regardless of wider economic changes.”
On risk, both mortgage advisers underlined that volatility has not disappeared, despite recent base rate cuts. Ahmed pointed to a still uncertain environment, with stubborn inflation, political noise and cautious lenders leaving open the possibility of renewed upward pressure on rates. Against that backdrop, fixed products can offer what he called “psychological comfort” for borrowers with limited room for error, even if they sacrifice some flexibility and potential upside.
Variable rates, whether trackers, discounted deals or standard variable rate-linked products, remain attractive to borrowers who can tolerate payment swings and want optionality. They often start with lower initial rates than equivalent fixes and, crucially, may come without ERCs. For more financially resilient clients, that can enable a more active strategy of refinancing, reshaping borrowing or exiting quickly if their circumstances or the market change.
Borrower profile, therefore, is central to how brokers match clients to products. “Borrower profile plays a major role in the recommendation.” said Pinkerton, who sees first-time buyers, young families and those with tight affordability as typically better suited to the stability of fixed rates. For these groups, the ability to budget with confidence during what is often a financially stretched period can outweigh the appeal of shaving a few basis points off the rate.
Ahmed agreed that first-time buyers are generally more risk-averse. “They tend to prefer fixed rates, as these offer predictability and make budgeting easier,” he said. “They also tend to understand the appeal of knowing exactly what their payments will be for a set period.” For such clients, advisers note that a simple, predictable product can support both mortgage affordability and wider financial planning.
Investors, by contrast, often adopt a more tactical stance. Many are comfortable with variable rates, especially when rental income provides a buffer and when their business model relies on refurbishing and refinancing quickly. For landlords undertaking light works to add value, being tied into a long fixed rate with steep ERCs can limit their ability to release equity and redeploy capital. In these cases, avoiding lock-in can matter more than the precise starting rate.
High earners and those with substantial savings may also be better positioned to navigate variable payments if rates move against them, while still benefiting if cuts come through sooner or deeper than markets imply. Conversely, clients with constrained monthly budgets or long-term ownership horizons tend to value fixed payments, even at a modest premium.
Over the longer term, both advisers cautioned against assuming that one type of rate will always beat the other. Ahmed argued that outcomes are more closely tied to timing and borrower behaviour than to the product label. Regular reviews, active refinancing and timely switches can have a greater impact on total interest paid than whether a client starts on a fixed or variable deal. In practice, very few borrowers remain on a single product for the full mortgage term.
For Pinkerton, there is also a practical dimension that many borrowers never see: lender appetite, service levels and property criteria can all influence what is genuinely suitable. She pointed to issues such as backlogs in underwriting, reluctance around certain property types, and differing stances on factors like lease length or ex-local authority stock as elements that brokers must weigh alongside rate and fees.
Both advisers underscored a common point: the broker’s role is less about chasing the cheapest headline and more about designing a durable structure around a client’s plans.
“People don’t realise just how much goes into recommending the most suitable and cost effective product for our clients,” Pinkerton said.
Ahmed echoed that sentiment. “As brokers, we should shift the conversation away from chasing the lowest rate and instead focus on structure, strategy and suitability. The best mortgage is not fixed or variable by definition; it is the one that fits the client’s plan!” he pointed out.
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