Deciding between a fixed and a variable interest rate, or a combination of both, is largely a personal choice. Do you need the certainty of set monthly repayments or are you looking for a little more flexibility and a saving when interest rates drop? Each option has its own set of pros and cons.

Floating interest rates: the interest you’re charged varies, moving in line with the OCR, so any fluctuations in the market will be reflected in your mortgage repayments.

• More flexibility allowing extra repayments.
• No break fee so you can fix part of your mortgage at any time.
• Repayments fluctuate with interest rate changes making it harder to budget.
• Rates tend to be higher than fixed interest rates.

Fixed interest rates: A fixed rate means the interest you pay remains constant for a set period of time.

• More certainty with set repayments which can simplify budgeting and financial planning.
• Locking in a fixed interest rate ahead of an increase could save you money.
• No benefit if interest rates drop.
• Does not allow for any extra repayments or early repayments.