5 year or 2 year fixed mortgage?

[Jessica12345625]

What would you get for a house at the moment (given brexit and Covid)...
5 year fixed mortgage at 2.75% or 2 year fixed at 2.1%?
It makes the difference of about £100 a month.

Two year! But don’t quote me on it 😊

I took 5 years just with brexit etc on the horizon and the recession looming I wanted as long as possible.

Depends what you want out of it. If you worry about affordability if the repayment rises, or you value knowing exactly what's going out over the long term then fix for longer.

I have always fixed for five years at a time and in terms of interest rates it has often been the 'wrong' decision. But it didn't bother me because I valued the peace of mind more than I was concerned about saving £50 a month. But obviously other people would take the opposite view.

N,S&I interest rate has just gone down...

I can't see interest rates rising anytime soon. I personally always go tracker because I'd rather gradually increase payments in the case of interest rate rises than suddenly have to find significantly more at the end of a term.

The other thing to consider is loan to value, if your property value increases you can potentially remortgage at a lower LTV and access lower rates.

If you can afford both I'd also consider overpaying, nothing to be made on savings currently so reducing mortgage might be sensible.

It depends on what you can afford but why are your options do limited?

Have you checked out first direct?
Historically, they are both incredibly low rates, I'd be tempted to do 2 years but over pay?
Perhaps look at a tracker? With rates so low... And corona.. I can't see them rising soon..