UK finance jargon - in plain English
Two different ways your mortgage interest rate can be set, with very different levels of certainty.
A fixed rate mortgage locks your interest rate for a set period, typically two or five years. Your monthly payment stays the same regardless of what happens to interest rates in the economy. A tracker mortgage follows the Bank of England base rate plus a set margin. If the base rate goes up, your payment goes up. If it falls, your payment falls. Trackers can be cheaper when rates are low or falling, but fixed rates give certainty.
You take a two-year fix at 4.5%. Even if the Bank of England raises rates to 6%, your monthly payment does not change. On a tracker at base rate plus 1%, if base rate rises from 4% to 5%, your tracker goes from 5% to 6% and your payment increases immediately.
There is no universally right answer between fixed and tracker. It depends on your attitude to risk, your financial buffer, and where rates are expected to go. A mortgage broker can help you assess the options.
People pick fixed rates purely for the lower headline rate without thinking about what happens when the fix ends. The revert rate or SVR can be significantly higher, and being unprepared for that jump causes real financial stress.