Key facts
- Primary keyword: types of mortgages - independent editorial guide, no commission
- Primary sources: FCA, gov.uk, Money and Pensions Service
- Last reviewed June 2026 by Chandraketu Tripathi, Finance Editor
The Main Types of Mortgages Available in the UK
The main types of mortgages available in the UK are fixed rate, tracker, standard variable rate, discount, offset, and interest-only. Each type of mortgage has a different rate structure, risk profile, and suitability for different borrower circumstances. Understanding the types of mortgages available is the first step to choosing the right product.
Fixed-rate mortgages account for the majority of new completions. UK Finance data shows over 90 percent of borrowers choose fixed-rate products when rates are uncertain or rising. Among the other types of mortgages, tracker products are the most popular alternative, particularly for borrowers who expect the Bank of England base rate to fall.
The types of mortgages available at any given time depend on market conditions and individual lender product ranges. A whole-of-market mortgage broker can compare all types of mortgages across all lenders simultaneously and identify the most appropriate product for specific circumstances.
Fixed Rate Mortgages
A fixed-rate mortgage keeps the interest rate and monthly payment constant for an agreed period, regardless of Bank of England base rate changes. Fixed periods typically run from 2 to 10 years, with 2 and 5-year fixes the most common among all types of mortgages.
At the end of the fixed period, the mortgage reverts to the lender's standard variable rate unless the borrower remortgages. SVRs are typically higher than new fixed-rate deals, making timely remortgaging important.
Fixed-rate mortgages suit borrowers who value payment certainty and protection against rate rises. The trade-off is that if rates fall during the fix, the borrower cannot benefit without paying an early repayment charge to exit early.
Tracker Mortgages
A tracker mortgage has an interest rate that moves in line with the Bank of England base rate plus a fixed margin. If the base rate is 4.5 percent and the tracker margin is 0.5 percent, the mortgage rate is 5 percent and changes whenever the base rate changes.
Among the types of mortgages, trackers provide the most transparency because the rate is directly linked to a publicly announced benchmark. MPC decisions are scheduled eight times per year, giving advance notice of potential changes.
Tracker mortgages suit borrowers who expect rates to fall or remain stable, want rate transparency, and are comfortable with payment variability. Some trackers have a collar rate preventing the rate falling below a minimum even if the base rate does.
Standard Variable Rate and Discount Mortgages
The standard variable rate is the lender's default rate, set at the lender's discretion and not tied to any external benchmark. Among all types of mortgages, SVR products are the most expensive in most market conditions but carry no early repayment charge.
Discount mortgages offer a reduction below the SVR for an introductory period. Because SVRs vary between lenders and change independently of the base rate, the headline discount is less meaningful than the resulting pay rate compared with other types of mortgages on the market.
Remaining on SVR provides complete flexibility - no ERC applies. This allows selling, unlimited overpayments or remortgaging at any time without penalty, but the cost is typically 1 to 3 percentage points above the fixed-rate deals available.
Interest-Only Mortgages
An interest-only mortgage requires payment of only the interest on the outstanding balance. No capital is repaid monthly. At the end of the term, the full original loan amount remains outstanding.
Among the types of mortgages, interest-only products require a credible repayment vehicle - a plan for accumulating the capital sum at term end. Acceptable vehicles include ISAs, pension lump sums, investments, and property sale proceeds. Lenders assess the adequacy of the vehicle under FCA rules.
Interest-only is more common in buy-to-let, where landlords plan capital repayment from property sale. For residential owner-occupiers, it is available from certain lenders for specific circumstances including part-and-part arrangements combining repayment and interest-only elements.
Offset and Flexible Mortgages
Offset mortgages link savings accounts to the mortgage balance and calculate interest on the net position. Among the types of mortgages, offset products suit borrowers with significant consistent savings who pay higher-rate tax, as the interest saving is tax-free.
Flexible mortgages allow payment variation above and below the contracted amount, payment holidays, and in some cases drawback of overpaid funds. True flexible mortgages are less widely available than in the early 2000s, though many standard products allow the 10 percent annual overpayment.
Part-and-part mortgages split the loan between a repayment element and an interest-only element. This reduces monthly payments compared with full repayment while requiring a smaller repayment vehicle than a fully interest-only arrangement. When reviewing the types of mortgages at remortgage, the most competitive product type may differ from the one chosen previously. Borrowers who are genuinely uncertain which of the types of mortgages is most appropriate for their circumstances benefit from taking advice from a qualified whole-of-market adviser who can model different rate scenarios and explain the long-term cost implications of each of the types of mortgages available. Understanding the types of mortgages available and how each is priced relative to current market conditions is the foundation of a sound remortgage decision. A whole-of-market broker comparing all types of mortgages simultaneously can identify the lowest total cost option across all available lenders and all types of mortgages in minutes, saving significant research time. The right choice among the types of mortgages available is one that balances cost, certainty and flexibility given the borrower's specific financial circumstances.
Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Mortgage products, eligibility criteria and regulations change frequently. Consult an FCA-authorised mortgage adviser before making any decision. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority.
Frequently Asked Questions
What are the main types of mortgages in the UK?
The main types of mortgages in the UK are fixed rate, tracker, standard variable rate, discount, offset, and interest-only. Fixed-rate mortgages are the most popular, accounting for over 90 percent of new completions.
Which type of mortgage is best in 2026?
There is no single best choice among the types of mortgages. Fixed rates suit those who value certainty. Trackers suit those who expect rates to fall. The right type depends on individual circumstances, risk tolerance and rate expectations.
Can I switch between types of mortgages?
Yes, typically at the end of a fixed or tracker period when no ERC applies. A full remortgage application or product transfer is required to switch between types of mortgages.
What happens at the end of a fixed rate?
The mortgage reverts to the lender's SVR - typically the most expensive of all types of mortgages. Borrowers should arrange a new product before the fixed rate ends to avoid paying SVR.
Is an interest-only mortgage risky?
Among the types of mortgages, interest-only carries the risk that the borrower will not accumulate sufficient funds to repay capital at term end. Lenders are required to assess the repayment vehicle. Regular reviews throughout the term are essential.
Sources
Last reviewed June 2026 by Chandraketu Tripathi, Finance Editor, Kaeltripton.com
