UK Skilled Worker Mortgages: Fixed vs Variable Rates Explained

Introduction

Deciding between a fixed or variable mortgage is a major decision for skilled workers moving to the UK on a visa. This guide goes over the pros and cons, key features, and differences of both types of mortgages to help you decide which is the best choice for you.

What are fixed and variable mortgages?

Although lenders offer a wide range of mortgage products on the market today, borrowers are pretty much faced with a choice between two primary interest-rate types: fixed-rate mortgages and variable-rate mortgages.

A fixed-rate mortgage locks in your interest rate for a set period of time. The length can vary from anywhere between 2 to 10 years in the UK. Since your interest rate remains the same for the duration of your deal, monthly repayments don’t change either. This stability makes budgeting easier since you’ll know exactly how much you need to pay each month.

A variable-rate mortgage lets the interest rate change at any time during the life of the loan. Thus, your monthly mortgage repayments could go up or down, making budgeting harder.

There are three types of variable rate mortgage:

1. Tracker rate: follows an external benchmark, usually the Bank of England base rate.
2. Discount rate: offers a discount off the lender’s standard variable rate.
3. Standard variable rate (SVR): the lender’s default interest rate.

Fixed vs variable mortgage rates

The table below goes over some key differences between fixed and variable-rate mortgages, depending on which type of variable-rate mortgage you choose.

Want to know more about fixed vs. variable rates? Check out this page. (for informational purposes only).

Why the decision matters more for skilled worker visa holders

Skilled worker visa holders face additional considerations compared with settled UK buyers. Lender eligibility, deposit requirements, and the need to align mortgage decisions with visa timelines and potential settlement applications all affect product suitability. A mortgage decision that looks purely financial to a settled borrower can have extra consequences for a visa holder.

Should you choose a variable or fixed mortgage?

As a skilled worker visa holder choosing between a fixed-rate or variable-rate mortgage depends on your specific circumstances. When coming to a decision, consider the following:

1. How long is left on your visa (and do you expect to settle?)
   
   If your visa has a short remaining duration (e.g. under two to three years) and you don’t expect to settle permanently, flexibility should be a priority. Short fixed deals (two or three years) or variable mortgages that are cheaper to exit would make more sense for you as they reduce the risk of paying hefty early repayment charges if you must sell or return to your home country. On the other hand, if you are on a clear path to settlement (indefinite leave to remain) and expect to remain in the UK long-term, a medium-term fixed rate provides predictability while you establish longer-term plans.
2. How long you’ll keep the mortgage
   
   If you intend to own for only a few years (say two to four years), a variable mortgage or a short-fixed term could keep costs down and avoid paying for protection you won’t use. However, if you plan to stay in the UK and keep the mortgage for a decade or longer (especially if you intend to apply for settlement) a longer fixed term can protect you from future rate rises and help you lock in predictable repayments while you progress through your career and visa milestones.
3. Deposit size and lender pool
   
   Your deposit size significantly affects which products and lenders are available. Skilled worker visa holders often face a narrower pool of high-street lenders, and some lenders will require larger deposits (commonly 15–25%) compared with UK residents with settled status. If your deposit is small and pushes you toward lenders charging higher variable margins, it may make sense to wait and increase your deposit to access a competitive fixed deal. Alternatively, if you already have a substantial deposit that opens you up to more lenders and you’ll be able to compare attractive fixed and variable options to make a decision based on cost versus certainty.
4. Job security & income predictability
   
   Consider how secure and predictable your income will be over the coming years. If your income is steady and your employment contract is stable, you might be able to tolerate a variable mortgage and benefit if rates fall. However, if your role relies on commissions, bonuses, or short-term contracts (or if you expect income disruption during visa renewals) a fixed-rate mortgage would provide you with certainty and reduces the risk that a rate rise coincides with a temporary income dip. Certainty matters when managing visa application costs, relocation expenses and everyday living.

Get a better idea of your borrowing power by using WIS’s Mortgage Affordability Calculator. (This calculator is for illustrative purposes only and does not constitute mortgage advice.)

Practical Tips / Recommendations

1. Shop with specialist brokers: Use mortgage brokers who specialize in non-UK or visa-holder cases as they know which lenders have appetite for skilled worker applicants, widening your options and making the process stress free.
2. Check product fees: Compare overall cost, not just headline rate. Double check arrangement fees, valuation fees, and early repayment charges since these can change which product is cheapest in practice.
3. Consider portability: Some fixed deals allow portability (moving the deal to a new property) which can be useful if you relocate within the UK. Confirm portability before committing.
4. Plan for visa gaps: If you anticipate any visa renewal gaps, ensure your affordability assessment factors in temporary income interruptions.
5. Build a buffer: Hold 3–6 months’ worth of mortgage payments in emergency savings to cover short-term shocks regardless of your mortgage type.

FAQ Section

1. Can I get a 5-year fixed mortgage on a Skilled Worker Visa?
   Yes, many visa-friendly lenders offer fixed deals. However, eligibility depends on your residency history, deposit and the remaining term on your visa. Specialist lenders sometimes have explicit “visa” products.
2. Are mortgage rates higher for visa holders?
   Sometimes, lenders might charge slightly higher rates or request larger deposits because of perceived higher risk. However, products vary widely, and brokers can often find competitive offers.
3. If I go with fixed rates now and interest rates fall, can I switch?
   You can remortgage or switch, but fixed deals often have early repayment charges that can be expensive, so those should be factored into your decision.
4. How does the length of my visa affect how much I can borrow?
   A shorter visa often limits the amount a lender will lend; a longer visa generally increases the borrowing amount a lender will consider.
5. What if my visa application is refused or is unexpectedly shortened while I have a mortgage?
   Lenders may offer temporary options (repayment plans, short grace periods). Seek an immigration adviser and specialist mortgage broker (or solicitor) immediately to explore remortgage, transfer, or sale.

Conclusion/CTA

If you’d like a quick walkthrough of what we just covered watch this short video from WIS that walks you through mortgage eligibility, deposit needs and the documents lenders want.

(This video is for general information only and does not constitute regulated mortgage advice.)

Important FCA Warning

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.

Disclaimer:

This article is for general information only and does not constitute mortgage advice or a personal recommendation. Mortgage decisions should be based on your individual circumstances, and you should speak to a mortgage adviser authorized by the Financial Conduct Authority before taking action.