Compare · Two-year fix vs Five-year fix
Two-year fix vs five-year fix mortgage — which is right for you?
In short. A two-year fix gives short-term payment certainty and lets you remortgage sooner — useful if you expect rates to fall. A five-year fix locks in your rate for longer, with bigger early repayment charges if you leave early.
Both are 'fixed-rate' mortgages in the UK — your interest rate doesn't move during the deal period. The trade-off is how long you want to lock in versus how often you want the freedom to remortgage.
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Side by side
| Criterion | Two-year fix | Five-year fix |
|---|---|---|
| Length of fix | Two years | Five years |
| Rate level | Usually slightly higher or lower than 5-year, depending on the yield curve | Often priced off longer-term swap rates |
| Payment certainty | Short | Medium-term |
| Early repayment charge (ERC) | Typically 1–2% in years 1–2 | Typically 5% reducing to 1% across years 1–5 |
| Refinancing cost frequency | Every 2 years (product/valuation/legal fees) | Every 5 years |
| If rates fall | Can remortgage sooner to a cheaper deal | Locked in (ERC applies) |
| If rates rise | More frequent renewal risk | Protected for longer |
When Two-year fix usually wins
- You think rates will fall over the next 2–5 years
- You may want to move home or change product soon
- You want lower ERCs if circumstances change
- You're happy to absorb remortgage fees more often
When Five-year fix usually wins
- You want long-term payment certainty
- You don't plan to move or significantly change the loan
- You want to avoid frequent remortgaging costs
- You're risk-averse to rate rises
FAQ
- Can I overpay during a fixed period?
- Most fixed-rate mortgages allow penalty-free overpayments of up to 10% of the balance each year. Above that, the early repayment charge usually applies. Check the offer document.
- What is the ERC if I leave a five-year fix early?
- Typically a tiered percentage of the outstanding balance — for example 5% in year 1, falling by 1% each year to 1% in year 5. Each lender's schedule is different.
- Are there fixes longer than five years?
- Yes — 7, 10 and even 30-year fixes exist in the UK, though far less common. Trade-off is even longer ERC commitment.