Choose a 5-year fixed rate mortgage and you’ll lock in the same interest rate for the first five years of your mortgage, even if the Bank of England base rate rises. A fixed rate can provide a balance between security and cost although as always, there are benefits and downsides to keep in mind. To find out more, explore our 5 year fixed rate mortgage guide and use the table to compare our best five year fixed rate mortgage deals.
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A five year fixed rate mortgage gives you a fixed interest rate for 5 years. During this period, your monthly mortgage repayments will not change, even if the Bank of England increases the base interest rate or your lender hikes its standard variable rate (SVR).
A 5 year fixed mortgage gives you a lot of financial security, although that security comes at a cost. Even the best 5 year fixed rate mortgages have a higher interest rate than a fixed rate mortgage lasting two or three years, which means higher monthly repayments too.
Over 5 years, you could pay thousands of pounds more in interest than you would with a 2 year fixed rate mortgage.
The best 5 year fixed mortgage is one that costs you the least amount of money over 5 years.
When comparing 5 year mortgages to find the cheapest deal, always take into account the interest rate AND the set-up fees. If you're remortgaging or switching mortgages, you may also need to factor in valuation, conveyancy and home survey fees.
Remember that if you add any of the fees to your mortgage, you will pay interest on them too, which will increase your monthly repayments.
You can use the mortgage comparison table at the top of this page to find the best 5 year fixed rate mortgage for your financial situation.
Mortgages are complex products: read our mortgage guide to learn about all the fees, charges and pitfalls to watch out for when comparing mortgages.
If you're not sure that a 5-year fixed mortgage is the right home loan for you, use these mortgage comparison pages to find other fixed rate deals:
The main advantage of a 5 year fixed mortgage is knowing that your monthly repayments will stay the same for five years.
Knowing what your outgoings will be is helpful when budgeting and many people choose a fixed rate mortgage for this reason.
The disadvantage is that with even the best 5 year mortgage rates, you lose some flexibility when it comes to moving your mortgage and making additional repayments to your lender.
Plus, should the Bank of England reduce the base rate, you'll be stuck on a higher rate of interest until the end of your fixed term. Early repayment charge (ERC)
If you repay your mortgage entirely within 5 years - normally by remortgaging - you are likely to be hit with a hefty early repayment charge (ERC).
The ERC varies, but it is usually a few percent of your total mortgage loan. On a larger mortgage, this can be tens of thousands of pounds. You may also face charges if you want to overpay.
Most lenders will allow you to overpay on your mortgage by up to say 10% each year, but if you overpay too much, you could be charged a big fee.
If you plan to move house within the next 5 years, search for a portable mortgage as you should be able to take this with you (if you don't get a portable mortgage, you'll have to pay the ERC).
Either way, it’s important to weigh up the pros and cons when deciding which mortgage deal to go for. With the current economic uncertainty, you may welcome the security of knowing exactly how much you will have to pay each month for the next 5 years.
The Bank of England base rate is currently just 0.10% which means that for many people, now is a good time to snap up a low five year fixed rate mortgage.
But if a global recession is on the horizon, the cost of borrowing may come down - leaving you paying over the odds.
When making your decision, try to think long term: Will your personal and financial situations be the same 5 years from now?
There are no particular criteria for obtaining the best 5 year fixed mortgage rates, although there are a few things to consider before committing to one.
5 year fixed mortgage rates are most suitable for people who are looking for the long term security of knowing how much they will pay each month.
Equally, a 5 year mortgage is best for people who aren’t likely to have a change in circumstances within five years, as there can be costly penalties for changing your mortgage within the fixed term.
After 5 years when the fixed term expires, your mortgage will usually revert to your lender’s SVR, which will typically be quite a lot higher than your fixed rate.
For this reason, it’s worthwhile looking into remortgaging and locking in a lower interest rate before your fixed rate runs out. You can start searching for the cheapest 5 year fixed rate mortgage around 3 to 6 months before your term ends.
The longest fixed-rate mortgage deal in the UK is 10 years. You will pay a pretty hefty premium for the financial security that comes with a long term fixed rate mortgage: the interest rate is usually about 0.5% higher than the best mortgage rates on 5 year fixed rate deals. Over 10 years, that will likely mean thousands of pounds in extra interest payments.
Deciding on the right type of mortgage is an individual choice and often comes down to your personal circumstances.
It’s important to consider whether you need the financial security of a 5 year fixed rate mortgage as better interest rates are certainly available if you prefer a 2 year fixed rate mortgage.
Alternatively, you can consider tracker or discount rate mortgages rather than a fixed rate mortgage.
If you decide that a fixed rate home loan is the best option for you, it’s time to start comparing the cheapest 5 year fixed mortgage deals to find the most suitable one for you.
The best deal will have low arrangement fees and a competitive interest rate. Remember that the best interest rates are reserved for those with a large deposit – and because you’re stuck with it for 5 years, it’s probably worth aiming for at least a 30% deposit (70% LTV).
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Last updated: 17 November, 2021