For those looking for the best visual quality they can get in Hogwarts Legacy, the Fidelity graphics mode is the best choice as it improves lighting, shadows, and detail.
On the other hand, if you want smoother flying, combat, and even cloth physics, you should pick Performance mode, as it has 60 FPS instead of 30.
Essentially, if you prefer a better-looking game with faster load times, then go with the Fidelity mode. However, go with the Performance mode if you’d rather have more fluid-feeling combat and smoother flying.
You’ll definitely need an understanding of every graphical mode in Hogwarts Legacy first, though, before making your final decision.

It is worth noting that there are additional graphics modes in Hogwarts Legacy, including Fidelity with Raytracing, Balanced, and HFR Performance.
However, as we have not seen gameplay from these yet, we cannot comment on how much better or worse they are comparatively.
Hogwarts Legacy Graphics Mode Comparison
The Fidelity mode not only has improved visuals but also better loading times. The trade-off, however, is that Performance mode has a higher framerate with smoother broom flight and combat.
During the Hogwarts Legacy preview event, attendees found that the Fidelity mode took around 8 seconds less to load new areas of Hogwarts.
Here are some side-by-side images of Hogwarts Legacy in both Fidelity and Performance mode so you can see the differences in graphical quality:

It’s clear that the Fidelity mode has far better shadows and lighting than the Performance mode. Additionally, there is more detail in character models.
Exploring the enormous open world of Hogwarts Legacy is therefore going to be more visually stunning in Fidelity mode than in Performance mode.

However, while the visuals look substantially better, they don’t demonstrate the differences in performance.
For example, the surprisingly detailed broom flight mechanic in Hogwarts Legacy is far smoother in Performance mode than in Fidelity mode.

It is also worth noting that while the Performance mode has far longer load times, this will likely be patched out by the officially confirmed day-one patch.
You can check out how much smoother Hogwarts Legacy is at 60 FPS in the video below. It’ll also demonstrate the stark differences in load times.