Mortgages, explained
How fixed and tracker deals work, when to start thinking about remortgaging, and what your monthly payment might be.
Fixed vs tracker
Fixed rate
Your interest rate stays the same for a set period (commonly 2, 3, 5 or 10 years), so payments are predictable. Leaving early usually means an early repayment charge (ERC). If rates fall, you don't benefit until the deal ends.
Tracker
Your rate moves with the Bank of England Bank Rate (currently 3.75%) plus a set margin. Payments rise and fall with Bank Rate. Some trackers have no ERCs; some have a "collar" (a minimum rate).
When a deal ends you usually move to the lender's standard variable rate (SVR), which is often higher.
Remortgage timing
- Many lenders let you secure a new deal about 3–6 months before your current one ends – check your lender's policy.
- Look up any ERC and its end date in your mortgage offer.
- Your loan-to-value (LTV) matters: a lower LTV often unlocks lower rates.
- Factor in arrangement, valuation and legal fees – a lower rate with a large fee isn't always cheaper over the deal.
- Product transfers (staying with your lender) may need less paperwork; switching lenders means a fresh affordability check.
Free, impartial guidance is available from MoneyHelper. Mortgage advice is regulated; MoneyBySharma doesn't give it.
Mortgage repayment calculator
Outstanding balance by year
Assumptions: the rate stays the same for the whole term (in reality deals end and rates change); interest is calculated monthly at one-twelfth of the annual rate; overpayments are added on top of the monthly payment and reduce the term, not the payment; fees, ERCs and overpayment limits (often 10% a year) are ignored. For interest-only, the loan must be repaid in full at the end of the term.
Sources (checked 12 October 2026): Bank of England – Bank Rate; MoneyHelper – Mortgages (free, government-backed guidance).