One of the biggest decisions when taking out a mortgage is whether to fix your interest rate — and if so, for how long.
The most common fixed terms in the UK are 2 years and 5 years. Each has its own benefits and drawbacks depending on your financial situation, risk appetite, and what you expect interest rates to do in the future.
At Mortgage Knight, we guide clients through this decision daily. Here’s a breakdown of the differences between a 2-year and 5-year fixed mortgage, real-life case studies, and how to decide what’s right for you.
2-Year Fixed Mortgage
5-Year Fixed Mortgage
Do you prioritise lower monthly payments now (2-year) or certainty for longer (5-year)?
How likely are you to move house, remortgage, or need flexibility in the next 2–3 years?
Would you feel more comfortable with short-term savings or long-term security?
How might changes in the Bank of England base rate or SONIA swap rates affect future products?
Can you afford potential rises if you choose a 2-year fix and rates are higher at renewal?
Profile: Teacher, 10% deposit, tight budget.
Choice: 5-year fix at a slightly higher rate.
Reason: Needed absolute certainty for monthly payments while settling into her new home.
Outcome: Peace of mind and no need to worry about remortgaging quickly.
Profile: IT contractor, 20% deposit, confident income.
Choice: 2-year fix, betting on rates falling in the near future.
Reason: Willing to accept remortgage fees later in exchange for flexibility.
Outcome: Lower initial payments with the option to switch if better rates appear.
Profile: Couple with two kids, planning to upsize in 3 years.
Choice: 2-year fix.
Reason: Avoid being locked into a 5-year deal and facing ERCs if moving.
Outcome: Flexibility to change mortgage when moving house.
Fixing gives you certainty of payments, protecting against rate rises. Whether you should depends on your financial stability and risk tolerance.
Neither is universally better. A 2-year fix usually has a lower rate and more flexibility, while a 5-year fix provides long-term security.
You’ll usually revert to the lender’s Standard Variable Rate (SVR), which is often higher. Most borrowers remortgage before this happens.
Yes, but you’ll usually face an Early Repayment Charge (ERC), especially in the first years of the fix.
No one can say for sure. Rates are influenced by inflation, the Bank of England base rate, and SONIA swap rates. A broker can help you assess market trends.
Mortgage Knight will explain the pros and cons in your situation, check lender options, and secure the best deal for your goals — whether that’s short-term flexibility or long-term stability.
