Two-year fixed rates are the top choice among borrowers, rising in popularity by 8% between September 2025 and April 2026, according to the latest data from Moneyfactscompare.co.uk.
But while variable and tracked rates are favored by only a small percentage of customers overall, the number choosing them has more than doubled.
According to Moneyfactscompare.co.uk, in September 2025, they accounted for a 6% share of the market but this rose to 13% in April. This is an increase of 116%.
So, what happened to make these products more popular?
The war in Iran had a significant impact on mortgage rates, as the threat of inflation caused by rising oil prices drove up financing costs for mortgage lenders. This means that fixed interest rates rose by more than 1% in March.
In April, things began to stabilize a little after the ceasefire. Then we saw mortgage lenders start to adjust fixed interest rates downward.
Now this tracker and variable rates are even more attractive.
What’s the big deal with trackers and variable mortgages?
Tracker mortgages have rates that follow the movements of the Bank of England base rate and variable rates also follow a similar path.
Often, trackers don’t charge any early repayment fees, which means they’re more flexible for borrowers waiting for mortgage rates to fall.
But Adam French, head of consumer finance at Moneyfactscompare.co.uk, said borrowers who opted for this were betting on interest rates falling in the short term.
“The economic consequences of the conflict in the Middle East have turned interest rate expectations upside down, leading to higher borrowing costs and changing borrower behavior,” he said.
Variable and tracker mortgages remained a minority choice, he said. However, the rise in interest rates suggests that borrowers may be willing to gamble on the possibility of interest rate relief.
Downside To track and change mortgages
However, there is a reason why fixed rates remain the choice for the majority.
“Variable and discount mortgages can look more attractive when fixed rates rise quickly, because they typically start falling,” French continued.
“However, they also pass on much more of the risk of future base interest rate or standard variable rate changes directly to the borrower, rather than the lender taking on that risk through a fixed rate product.
“There has also been a shift towards short-term fixed options. With five-year fixes up by more than 70 basis points since February, many borrowers appear to be preferring two-year deals in the hope that the current rise in interest rates will be temporary.”
