Two-year fixed rates are the number one choice amongst borrowers, rising in popularity by 8% between September 2025 and April 2026, according to the latest data from Moneyfactscompare.co.uk.
But whilst variable and tracker rates are in favour with just a small percentage of customers overall – the number choosing them has doubled.
According to Moneyfactscompare.co.uk, in September 2025 they made up a 6% share of the market but this increased to 13% in April. This is a 116% rise.
So, what’s happened to make these products more popular?
The war in Iran had a huge impact on mortgage rates, with the threat of inflation caused by rising oil prices driving up funding costs for mortgage lenders. It meant fixed rates soared by over 1% in March.
In April things started to stabilise a little following the ceasefire. We then saw mortgage lenders begin to tweak fixed rate prices lower.
Now this is made tracker and variable rates more attractive.
What’s the big deal with trackers and variable mortgages?
Tracker mortgages have rates which follow the movements of the Bank of England Base rate and variable rates also follow a similar trajectory.
Trackers quite often have no early repayment charges, meaning they are more flexible for borrowers waiting for mortgage rates to fall.
But Adam French, head of consumer finance at Moneyfactscompare.co.uk, said those borrowers opting for these were betting on rates falling in the short term.
“The economic consequences of the conflict in the Middle East have turned interest rate expectations on their head,” he said, “pushing up borrowing costs and changing borrower behaviour.”
He said variable and tracker mortgages remained a minority choice. Yet the uplift in interest suggested borrowers may be prepared to gamble that rates could ease.
The downside to trackers and variable mortgages
There’s a reason, however, why fixed rates remain the choice with the majority.
“Tracker and discounted variable mortgages can appear more attractive when fixed rates rise quickly, as they typically start lower,” French continued.
“However, they also pass much more of the risk of future base rate or standard variable rate changes directly onto the borrower, rather than the lender taking on that risk through a fixed-rate product.
“There has also been a shift towards shorter-term fixed options. With five-year fixes rising by more than 70 basis points since February, many borrowers appear to be favouring two-year deals in the hope the current spike in rates proves temporary.”
