Certainly there is free will in the story: Unferth killed his brother, and he lacks honor in this; it is also...
In Beowulf, the ideal of free will is choosing to follow the norms of his society, as well as directing his path as God would have him act.
Certainly there is free will in the story: Unferth killed his brother, and he lacks honor in this; it is also dishonorable that he is jealous of others who have achieved more than he has in battle. His fate will be, as Beowulf puts it, damnation—punishment.
First, Unferth looks for a fight, trying to call Beowulf a liar in the story of his victory over Breca.
UNFERTH, THE SON of Ecglaf who sat at the feet of the Scylding's lord, spoke quarrelsome words. The quest of Beowulf, that noble mariner, galled him greatly, for he always begrudged other men who might achieve more fame under heaven than he himself.
Beowulf responds to Unferth, chastising him for speaking drunk—under the influence of mead (a honey wine). But he remains honorable: he does not raise his voice as a guest in Hrothgar's home or pick a fight, though Unferth has broken the laws of hospitality which were time-honored—whether the guest were friend or foe.
Beowulf does, however, speak of Unferth's murder of his brother; along with being cowardly and villainous, it is also a sin against God, and God plays a crucial part in the lives of those living during Beowulf's time (and into the Anglo-Saxon age).
...you were the bane of your dear brother, your closest kin, for which the curse of hell awaits you, regardless of your cunning wit!
Unferth has free will as well as any man. He has chosen his path, disregarding the laws of God and man. His fate is sealed, by his own choices.
Beowulf, the hero, makes his choices of free will as well. However, his honor as a warrior, as well as a man who has chosen to show his allegiance to his God—acknowledging God's will in his life, and choosing to follow God's will—is what makes him so heroic to those who knew of him and admired him. The ideal of free will (at that time) is to look at one's choices, follow the laws of God and man, and give oneself up to whatever fate awaits a man or woman having done the best he/she could do in the days on earth he/she was given.
Beowulf's choices are clear. Before he fights Grendel, he announces to all present that he will fight on equal footing with the beast, with bare hands only. God will decide who will be victorious. Beowulf freely chooses to come to Hrothgar's aid—a valiant gesture. He opens himself up to possible death by evening out "the playing field" in terms of using no weapons. And he reconciles himself to his fate—made by his own free will—as God would have it.
I alone, with my liegemen here, this stalwart band, may purge Heorot! I also hear that this fell beast in his swaggering despises weapons, and, therefore, I shall forgo the same—and in this as well, may Hygelac also be beneficent to me—and will bear neither sword nor buckler nor gold-colored shield, but with my hand's grip, I will face the fiend and fight for life, foe against foe. There shall the one taken by death resign himself to the Lord's doom.
So Beowulf has free will. He makes his choices set on the norms of society and the teachings of the Church. The ideal, I believe, is that men and women do exactly as Beowulf does. It is for this reason that he is lifted up in the oral tradition, praised and revered for his actions.