2 year or 5 year fixed mortgage deal? We can't decide

[Monr0e]

I know no one can give any definite answers, but we're struggling to decide whether to go for a 2 year fixed rate or a 5 year. We've tried reading up on future predictions etc but these are all just best guesses and we are still none the wiser

So if you have remortgaged recently, what have you gone for? And do you have any insider information that might help us decide 😉

We did 5 year fix for our new house earlier this year. This works very well for us because I’m pregnant so this will take us up to when new baby is about to start school so if rates are bad then at least nursery fees can be put towards it. I think a long fix at the moment is a good option for most.

5

We remortgaged when our two year fixed rate was over and we went for 5 years, only a few months back.

Next year is going to be horrendous, world wide we are sleepwalking into an economic disaster. The ground is already set, it's just a question of watching it play out. Get the best, longest fix you can and fill your house with lodgers to help pay it down.

This is our worry, that we will be kicking ourselves in a couple of yours time.

Am moving house and we’ve gone for a 5 year fix. Planning to stay in new house longer than 5 years, and pretty sure rates are unlikely to be better in 2 years. Also, the 2 year rates really don’t seem much better than the 5 year ones.

That's a good way of looking at it. We know we can afford the increase now, we don't know how much it could be in 2 years time, but I'd rather fix and them go down than not fix and be looking at an even greater increase.

Thank you everyone

We have been offered the same rates for both 2 and 5 year deals.

We were offered even rates for 2 and 5 years. We went for 5, mostly because in 5 years time both kids will be out of childcare so we should be in a much better financial position.

We've just fixed for three years to be different 😁we are hoping to be mortgage free in 5 years and 2 years seemed too soon (have always fixed for two years previously but never in such an uncertain time)

5yrs. If the monthly amounts are reasonable and you can manage them on one salary should anything go tits up. If only we could fix all our outgoings for the next 5 yrs instead of continuing increases.

We fixed at five last year, renewing a previous five year fix. Love a bit of certainty and that seems so important right now especially. We would have looked at ten but hoping to pay it off within that.

Rates are going up, even if they come down again it’s going to be over a period of some years. Two year fixes can prove expensive if you keep having to pay arrangement fees too.

I’ve been in that position where I’ve been stuck on a higher fixed rate when rates drop (2009-2011). Stuck on something like 4.38 when rates were more like 2.5. It’s not so bad as you already know you can afford it and it’s not forever. Though when that ended I didn’t fix again at all four years!

We fixed for five. It takes us very close to having paid off the total so that was another factor to have the certainty too.

We went 5. Can’t imagine we would get much better than 2.69 in the next few years tbh. I like the stability of a few years fix anyway.

@Monr0e I too fixed for 5 years. I missed the opportunity to fix at a lower rate as I was dithering between 2/5/10 & shoved my head back in the sand. I may have to go back overseas to where my Mum lives and the ERP on 5/10 years is a LOT. But in the end decided I'd far rather know how much I'll be paying for the next 5 years & I can rent it out if I need to go within 5 years, if my plan was definitely staying here, I'd have fixed for 29.

the way I looked at it, I fixed at 2.48%, the MOST, extra it will cost me is 2.48%, but far more realistically maybe 1%. IF they were to go down within 2 years (which I can't see happening) which isn't a lot.

whereas there's no guarantee of what the interest rate could be up to in 2years time.

I'm probably older than you, but I can remember my parents mortgage going up to 17% (not U.K. by then, I can't remember what it was in 1978 when we left). I don't expect it to go up anywhere near that, but 2.48% I can afford, no huge risk involved & very little chance of gaining anything by not fixing for 5 years. If I end up
Paying a bit more interest than I need to, I can live with that for the peace of mind knowing I afford the mortgage for 5 years.

There's naff all difference between nationwide 2/5/10 fixes at the minute.

We fixed for 5 years until end April 2027 (1.29% but we booked that rate in Dec) before the real rises hit

our justification for that over 2 was:

1. there wasn’t much difference in the 2 and 5 year rates;
2. nursery fees will be done in sept 2025 so we were currently at the “worst” point in time re outgoings and it would only get better (bar cost of living crisis now obvs!) so better to fix until all nursery fees gone;
3. Fixing fee was 999 so didn’t want to have to pay that again in 2 years time

I fixed for two last year as the two year rate was better. With the substantial increase in rates, I’m now looking at paying a lot more from August next year. I wish I’d gone for 5 now as the 5 year rate was still much better than anything on the market today. I’m trying to pay it down as much as possible while the rate is low.

With the rest of the economic uncertainty, I’d be inclined to go for 5 - OK, rates may go down but equally they may massively increase.

Thank you everyone, I thought I had updated but forgot!

We went for 5 years, and even though i was moaning at the increase in August, I am extremely grateful we sorted it in August and didn't leave it any later. I dread to think what deals we would be offered now

We went for a 5 year fix but wish I had gone for 10. Interest rates only going one way for at least 5 years prob longer. Unlikely to fall again for a long time

Hindsight eh. Do you really think it's going to be at least 5 years ?

We just fixed for 10 on Thursday evening.

I usually do 2 or 3 but will be doing 10 this time.

2years because the Bank of England is committed to an inflationary target of 2% and it aims to achieve that within 2 years. Which means interest rates should begin to start falling soon after.

Like someone else mentioned above, we want to reduce our loan to value by extending the property and secure a good rate.

I think 5 years is a good period too. 10 years I think is unlikely to lead to net savings unless the UK really tanks as a first world economy. I still have faith in the Bank of England.

We’ve gone for 5 years. 2 years can come around very quickly. We have a lot of expense in the next 5 years and then things will calm down and we can afford a much higher fixed monthly payment.(have gone for lower payment and will overpay when possible in meantime)
Also, found out that affordability was a bit more flexible with 5-year mortgages.