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.

They are unlikely to drop by much if they did and I can see them rising. If you can afford the 5 yr rate for the next 5 years then it's probably best to go with that.

I would fix for 5 if it were me!

How much would you be able to afford rates going up by though? Your home is a lot to gamble but I guess if you could afford it it's not as much of a gamble! They aren't coming down soon.

I can definitely afford it to going up a full percent, which would cover four BoE hikes. I do not think a lot of the tracker rates right now will hit the current fixed rates. But we all have our feelings on it.

No one knows if they they are coming down soon (and actually Halifax did drop its fixed rate this week). That’s the whole point of this unpredictability.

Rates arent going anywhere. We fixed for 5 at 3.89%, im fully expecting it to be 5% by the next. We will try to pay as much off as possible.

This is good advice. And I too remember the 17% interest rates and all the repossessions. the

I’m going to fix for 2 years. I got stung once for 5 years and then they went lower and lower. Sadly I’m coming to the end of a 1.17 5 year deal ☹️

We stick to trackers at the moment base rate plus 0.5%. We can afford the wiggle room

I actually made quite an epic fuck up. We had intended to pay off a lump sum before refixing (coming off 1.29 at end April next year on a hefty mortgage), but weren’t quite sure which way to do it - I.e. pay 10% off before end this year then another 10% just before it’s up, or not re-fix, slip onto SVR for a day or two whilst paying off lump sum then re-fix.

but I stupidly hadn’t realised that the year for overpayment purposes is the anniversary year! So now we can’t make the level of overpayment we’ve been saving for!

i keep telling myself the following:

-back in April (anniversary year), the indications were that there would be rate drops, so we probably would have held on to earn the extra interest.
-whilst this will now lead to higher monthly repayments, what we could do is pay off 10% in April and then pay a further 10% of new balance 2 May. Presumably doing that has a similar effect on the overall amount. Only fly in ointment is that we were going to make regular overpayments and now won’t be able to do that until May 2028! That said, we have the other smaller mortgage at 5.44% so we could just make overpayments on that in the interim.

gah!

Fix for as long as you can!

I'm fixing at 4.7% I think it is, for 5 years. It will be an increase of £25pm compared to what I'm paying now. It could have been less but I waited to accept the deal With the state of things at the moment, I don't think that's too bad and I don't think it will drop any cheaper in the next 5 years.

I'ts a tough call. I fixed at 5.95% for 5 years in 2009. Ended up breaking my fixed because interest rates fell to record low of around 1%. You just never know. But my story is that even if you fix, it may not mean you will be stuck with it.

Definitely fix for as long as you can! We fixed for 3 years @3.1% (now we are in Ireland where rates are slightly different maybe)

First direct offer unlimited overpayments, their current 5 year fee saver is 5.3 - 5.7% depending on your LTV. I haven't done recent sums but when we last remortgaged our mortgage was low enough that the higher rate for 5 years with the feeling saver was less than getting the lower rate and paying the fees up front.

Thank you @Superscientist sadly we are in channel isles so can’t get FD. Our rates are usually over 1% higher than mainland too due to limited market and risk. I’m with HSBC and in CI I’ve now discovered we can’t fix until 3 months out! And we have to pay a bond fee to change lender. So I think we will just have to do what we can do nearer the time and try our best to pay off as much as we can.

Really annoying as am trying hard to man for retirement at moment - I’m 48, DH 43 but it is what it is I guess!

That's annoying!

It is difficult to juggle all financial planning isn't it!

@Superscientist totally is! I suppose the other way to do it would be to break the fix now as we’d only have small ERF i think and refix but we’ve still got another 6 months at 1.29% so probably better to wait.

Ivan see a 4.69% with another lender but suspect that may go - I might give the broker a buzz and see how far out we could fix with another lender

We fixed at 4% for 10 years, 3 years ago.

That's also the call I'd have made OP. Because the difference between the two rates is so minimal, it doesn't seem worth it to lose the certainty plus having to faff around applying again so much sooner.

I’d go for 5 years, the rates aren’t going down anytime soon

We fixed for 5 yrs at 4.25 with Nationwide in August, with the ongoing global unrest the rates will only go up and so for me the fixed certainty was the way to go. Its already gone up since we fixed in August, the best deal I can find for our band of LTV for 5 years is now pushing 5%.

Good call!

Nationwide didn’t have that for a remortgage rate in August? Did you arrange it earlier

i just double checked and they started the month on 4.81% and ended on 4.79% (the lowest)

in fact, according to the published historical rates, the last time this rate was available was in 2025

We are going in to a tracker as we want to move within 2 years

If we had to fix now, I would go with a 5-year (we fixed for 5 years last year). Purely because the Tango Menance would still be in power at the end of a 2 year fix, and I can’t see the world being stable at all while he is still in office.