26 Mar 2025
Should I go for a two-year or five-year fixed rate?
Choosing which fixed rate to go for has been a dilemma for many of our clients so far this year. There really isn’t a right or wrong answer, but below we look into the pros and cons of a two-year and a five-year fixed rate to help make the right decision for you.
Two-year fixed rate
Pros
- Greater flexibility - this could be suitable for those who are expecting changes in their financial situation, or looking to move in the short term
- Opportunity to benefit if rates go down
Cons
- Frequently having to remortgage - it is likely you will pay a lender fee to secure the product each time which will add up
- Uncertainty - you will have less protection against changes in mortgage rates
Five-year fixed rate
Pros
- Long-term stability which could provide peace of mind
- Ability to financially plan and budget your monthly mortgage costs are going to be each month irrespective to any changes in the mortgage market
Cons
- Less flexibility
- Not ideal for those expecting changes in their financial situation, or those planning to move
- Potentially higher penalties for overpayments or ending your mortgage term early
You could even hedge your bets and consider going for a three-year fixed rate. Make sure you look at the differences between the current fixed rates to help you make an informed decision about which rate suits you best.
Remember to contact the friendly team at Mortgage Required who have access to whole of market, therefore, we can help to find you the best available rate: 01628 507477 or email: team@mortgagerequired.com
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