2 or 5 years mortgage fixed rate?

[Mortgagedecisions]

My fixed rate is ending. I’ve decided to fix but can’t decide if I should fix for 2 or 5 years. I’m interested in what others are doing if you’re remortgaging now.

I guess the crucial question is - do you think rates will go down? I can afford a slight gamble. I’m possibly overthinking as many years ago I fixed at just under 5% for 10 years thinking I had a great deal and the 2% rates happened.

We've just fixed for 2 years. But I have read a predicted 4 interest rate hikes in the next year so maybe it wasn't the best idea!

It’s hard isn’t it. I read that but also that experts predict 3% in 2 - 3 years time. So you may have made the best choice!

Fingers crossed!. Its all a gamble

We are hopefully moving but have got a 3 year fix. It’s inbetween so hopefully it’ll work out ok.
It could be even higher or have gone down a bit - it’s just so unknown at the moment!

I recently fixed for two years as I am hopeful it won’t be too bad by the time I can remortgage. Fingers crossed 🤞🏼

I just fixed at 4.5% for 5 years. I think they’ll go up quite a bit before stabilising

Thanks everyone. 4.5 for five years is very good. May I ask which lender? @BeurialJimberley

What rate have you been offered at 2 and 5 years?

I always fixed for 5 years as long as it wasn't stretching me. I figured if I could afford it then it was peace of mind for the next 5 years, and that even if it dropped a bit after 3 years, say, that was better than rising.

I'm a Gen X who bought a house in 1988 at an interest rate of just under 8%. By Nov 1989 Thatcher's govt had raised it to 17% to control inflation. It was horrific.

5.05% for 5 yrs with Yorkshire Building Society, 4.83 for 2 yrs. @AndyouWILLATONE

Yikes re the 17% @Hatty65.

Barclays, but I fixed it about 2 months ago, sorry. If it makes you feel better I had a rate of under 4% two week prior that I lost

I'm going for five years at 4.9%. I really can't see rates dropping in that period.

Have you tried the MSE mortgage calculators adding the fees in? £999 fees x3 over 5 years might be the same as additional debt growth from 0.22% different in interest rate.

tough call but I also think it'll be some time before rates drop

I fixed at 4.04% for 5 years in Jan when my 1.7% 5 year fix ended 😭 I figured that as I could afford the payments as they stand now, I would just go with it for midterm certainty.

I would fix 5 years, I think there will be some increases.

Same - also at 4.90 for 5 years

What would be a bigger problem to you

• fixing for 5 years at 5% and the interest rates dropping to 3.5 % in 2 years time and find yourself paying more that you might have done

OR -fixing for 2 years now at 5 % and finding in 2 years time they are 6.5%?

We moved in August 22 with a new mortgage at 2.8% our ported mortgage was at 1.8% and we stopped over paying this to increase our deposit and reduce the amount extra we borrowed as the rate was higher. When the ported mortgage came up for renewal we were offered a 3.8% deal. The day we were first offered it we thought it was poor deal but within 2 weeks and before all the paperwork was completed the rates had shot up to 7%. We secured the 3.8% deal the morning of a bank of England based rate rise and there was the Liz Truss mini budget.

We fixed for 5 years and now consider ourselves very fortunate to have done so.

It in part comes down to appetite of risk, we by in large take security and long term planning ahead of trying to predict the rates. I do get your hesitancy as my parents got stung by the 15% interest rates of the early 90s and the massive drop in interest rates in the 00s as they were on a 10 year fix at 7% thinking this is brilliant compared to 15% but rates plummeted and they ended up paying the early exit fees to remortgage at a more competitive rate.

It's so hard to predict interest rates. At Christmas we put money into fixed savings account and were struggling to find any above 4% as the expectation was 2-3 interest rate drops over 2026 and more in 2027. Instead there has been more conflict in the world and we all the fixed savings accounts are at 5% for 1, 2, and 3 year fixes.

Ours is up end April from 1.29!. And we can’t fix yet as not 6 months out (though not far off now). Not sure what to do either, 2,3 or 5! We have a top up maturing dec 2028 that’s at 5.44 as we borrowed a bit to do some building works.

current strategy is pay off a lump sum of the 1.29 before re-fixing then try to make overpayments within the 10% allowable from the get go. But there’s quite a bit of investigatory legwork I need to do

Thank you everyone. I’m going to fix for five years. It was helpful for me to get other opinions. You all got me to think about it from different viewpoints ⭐

I’ve just fixed at 5.29 for five years. Could probably have squished a bit lower if I was prepared to switch lenders but I CBA.

The Bank of England couldn’t tell you where interests rates are likely to be a few years time, let alone anyone on MN! Base it in your own personal circumstances (e.g. how close are you to the next LTV bracket, are you likely to move etc).

We are about to come to the end of our 5 year fix at 0.94% 😭😭😭😭😭😭
I’ve gone for a 3.99% 2 year tracker. Got it locked in a month ago. Even if rates rise a whole %point we’d still be the same as a current fixed rate.

I’ll take a chance! But also a little nervy about it. Hoping it won’t rise astronomically

We’ll probably go on a tracker mortgage at the end of our 2yr fix in March. We’ve found one at 1.4+base rate. Since fixed are horrendous right now, I think it’s a fair gamble at that rates will come down.