2-Year vs 5-Year Fixed Mortgage: Which Is Right for You?
Choosing the right fixed term length for your mortgage and circumstances.
Should I choose a 2-year or 5-year fixed mortgage?
Choose a 2-year fix if you may move or remortgage soon, or believe rates will fall. Choose 5-year for longer stability if you plan to stay put. 2-year rates are typically 0.3-0.5% lower but you'll pay remortgage fees more often. 5-year protects you from rate rises longer.
Compare fixed rate options with whole-of-market access.
Should I choose a 2-year or 5-year fixed mortgage?
Choose a 2-year fix if you may move or remortgage soon, or believe rates will fall. Choose 5-year if you want longer stability and plan to stay put. 2-year rates are typically 0.3-0.5% lower but you'll pay remortgage fees more often. 5-year fixes protect you from rate rises for longer.
Key Facts: 2-Year vs 5-Year Fixed
- •2-year: Lower rate but you'll remortgage (and pay fees) more frequently
- •5-year: Higher rate but longer security - no fees for 5 years
- •2-year suits those who may move or expect rates to fall
- •5-year suits those wanting stability who plan to stay in their home
- •Consider total cost including arrangement fees, not just the rate
2-Year Fixed
Lock your rate for 2 years. Lower initial rate but remortgage more frequently.
5-Year Fixed
Lock your rate for 5 years. Higher initial rate but longer term security.
Feature-by-Feature Comparison
Compare key features of 2-year and 5-year fixed rate mortgages.
| Feature | 2-Year Fixed | 5-Year Fixed |
|---|---|---|
| Typical interest rate | Lower (0.3-0.5% less) | Higher |
| Payment security length | 2 years | 5 years |
| Remortgage frequency | Every 2 years | Every 5 years |
| Arrangement fees paid | More often | Less often |
| Flexibility if moving | Sooner to end of deal | May need to port |
| Protection from rate rises | 2 years | 5 years |
| ERCs if exit early | Typically 1-2 years | Typically 1-5 years |
| Suits uncertain plans | ||
| Suits long-term stability | ||
| Popular with first-time buyers | Common | Increasingly popular |
Example: £250,000 Mortgage Over 10 Years
5 x 2-Year Fixes at 4.5%
- Monthly payment: ~£1,390
- Arrangement fees: £5,000-10,000 (5 times)
- Rate risk every 2 years
2 x 5-Year Fixes at 4.9%
- Monthly payment: ~£1,440
- Arrangement fees: £2,000-4,000 (2 times)
- Rate certainty for full period
*Illustrative example. Total cost depends on actual rates and fees at each remortgage.
When to Choose 2-Year Fixed
You may move within 2-3 years
Avoid paying ERCs if you sell before the fix ends.
You expect rates to fall
Access lower rates sooner when the market drops.
First property as a stepping stone
If you'll move up quickly to a larger home.
Your income may increase
Remortgage to a bigger loan as your situation improves.
When to Choose 5-Year Fixed
You're staying for the long term
No plans to move or make major changes.
You value budget certainty
Know exactly what you'll pay for 5 years.
Rates are expected to rise
Lock in protection for longer.
You want fewer fees and hassle
Remortgage half as often as 2-year fixes.
People Also Ask
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Frequently Asked Questions
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