Five-year fixed-rate mortgages
Lock in peace of mind with steady repayments and no surprises for five years straight.
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Fixed and sorted: what is a five-year fixed-rate mortgage?
A five-year fixed-rate mortgage means you'll pay the same interest rate for five years. No changes, no surprises - just stable monthly repayments. This type of mortgage can give you peace of mind, especially when the economy is uncertain or interest rates are on the move.
Why choose a five-year fixed-rate mortgage?
Stability in your monthly payments
If you like to plan out your finances and avoid unexpected costs, this mortgage gives you plenty of breathing room.
- No rate rises: Even if interest rates go up, your mortgage payments stay the same for five years.
- Reliable budgeting: You'll know exactly what leaves your account every month.
- Ideal for first-time buyers: Especially helpful if you're juggling other costs like childcare or car payments.
For example:
Say you borrow £200,000. If your rate is fixed at 4.5%, your monthly payment would be roughly £1,110 - and stays that way until the end of the five years. No mid-term shocks.
Protection from market unpredictability
With the Bank of England rate changing over time, this mortgage gives you a safe zone.
- No sudden hikes: You're protected even if rates jump next year.
- More time to plan: You've got five years to build savings or prepare for your next move.
- Suited to staying put: Great if you know you'll stay in the same home for a few years.
For example:
If the base rate increases by 1% in year two, someone on a tracker mortgage could pay £100+ more per month. With a fixed rate, you're not affected.
Keep in mind: the drawbacks
These mortgages aren't the perfect fit for everyone. Here are a few points to consider:
- Early exit fees: If you move or remortgage within five years, you could face an early repayment charge.
- Less flexibility: You can't take advantage if interest rates drop during the initial period.
- Slightly higher rates: Higher interest rates at the start, compared to two-year deals.
For example:
If you get a five-year fix at 4.8%, and two years later rates fall to 3.5%, you won't benefit unless you switch - and that could trigger fees.
Summing up
A five-year fixed-rate can offer calm in the financial storm. You get consistent mortgage repayments and the chance to plan ahead without stress. Remember to compare mortgages rates, and bear in mind that they're still affected by your financial situation, mortgage term, loan-to-value ratio, and the property's value.
Frequently Asked Questions
Can I leave my five-year deal early?
Yes, but there's usually an early repayment charge if you exit before the five years are up. These charges can vary between mortgage lenders and might be a percentage of your remaining balance. It's important to check the small print in your agreement and speak to your lender before making any early repayment decisions.
Can I leave my five-year deal early?
Yes, but there's usually an early repayment charge if you exit before the five years are up. These charges can vary between mortgage lenders and might be a percentage of your remaining balance. It's important to check the small print in your agreement and speak to your lender before making any early repayment decisions.
Can I leave my five-year deal early?
Yes, but there's usually an early repayment charge if you exit before the five years are up. These charges can vary between mortgage lenders and might be a percentage of your remaining balance. It's important to check the small print in your agreement and speak to your lender before making any early repayment decisions.
What happens after the five years?
Once the fixed rate period ends, you'll typically move onto your lender's standard variable rate (SVR), which is usually higher than your fixed rate. At that point, many people choose to switch to a new mortgage deal to avoid higher monthly payments. It's worth planning ahead a few months before your fixed term finishes.
What happens after the five years?
Once the fixed rate period ends, you'll typically move onto your lender's standard variable rate (SVR), which is usually higher than your fixed rate. At that point, many people choose to switch to a new mortgage deal to avoid higher monthly payments. It's worth planning ahead a few months before your fixed term finishes.
What happens after the five years?
Once the fixed rate period ends, you'll typically move onto your lender's standard variable rate (SVR), which is usually higher than your fixed rate. At that point, many people choose to switch to a new mortgage deal to avoid higher monthly payments. It's worth planning ahead a few months before your fixed term finishes.
Is it better than two-year fixed-rate deal?
This depends on your circumstances. A two-year fixed deal may offer a slightly lower rate initially but comes with less long-term certainty. If you prefer stability and don't want to remortgage often, a five-year fixed deal could suit you better. But if you expect to move or refinance soon, a shorter deal might be better.
Is it better than two-year fixed-rate deal?
This depends on your circumstances. A two-year fixed deal may offer a slightly lower rate initially but comes with less long-term certainty. If you prefer stability and don't want to remortgage often, a five-year fixed deal could suit you better. But if you expect to move or refinance soon, a shorter deal might be better.
Is it better than two-year fixed-rate deal?
This depends on your circumstances. A two-year fixed deal may offer a slightly lower rate initially but comes with less long-term certainty. If you prefer stability and don't want to remortgage often, a five-year fixed deal could suit you better. But if you expect to move or refinance soon, a shorter deal might be better.
Is it better than two-year fixed-rate deal?
This depends on your circumstances. A two-year fixed deal may offer a slightly lower rate initially but comes with less long-term certainty. If you prefer stability and don't want to remortgage often, a five-year fixed deal could suit you better. But if you expect to move or refinance soon, a shorter deal might be better.
Can I overpay on a five-year fixed mortgage?
Most lenders let you overpay up to 10% of your loan amount each year without penalties. Overpaying can reduce the total interest you pay and help you become mortgage-free sooner. Always double-check with your lender to understand their overpayment rules and whether they apply monthly, annually, or over the full fixed period.
Can I overpay on a five-year fixed mortgage?
Most lenders let you overpay up to 10% of your loan amount each year without penalties. Overpaying can reduce the total interest you pay and help you become mortgage-free sooner. Always double-check with your lender to understand their overpayment rules and whether they apply monthly, annually, or over the full fixed period.
Can I overpay on a five-year fixed mortgage?
Most lenders let you overpay up to 10% of your loan amount each year without penalties. Overpaying can reduce the total interest you pay and help you become mortgage-free sooner. Always double-check with your lender to understand their overpayment rules and whether they apply monthly, annually, or over the full fixed period.
Can I switch to a different mortgage during the fixed term?
You can switch, but doing so during the fixed term usually means paying early repayment charges. If interest rates drop significantly or your circumstances change, it might still be worth considering. Speak to a mortgage broker or advisor, and compare deals, before making the move.
Can I switch to a different mortgage during the fixed term?
You can switch, but doing so during the fixed term usually means paying early repayment charges. If interest rates drop significantly or your circumstances change, it might still be worth considering. Speak to a mortgage broker or advisor, and compare deals, before making the move.
Can I switch to a different mortgage during the fixed term?
You can switch, but doing so during the fixed term usually means paying early repayment charges. If interest rates drop significantly or your circumstances change, it might still be worth considering. Speak to a mortgage broker or advisor, and compare deals, before making the move.
About the author
Lawrence Howlett
Lawrence Howlett brings a results-driven mindset to his writing, shaped by over a decade of experience across finance, legal, and energy sectors. As the founder of Moneysavingadvisors, he’s built a reputation for turning complex financial concepts into clear, actionable insights for consumers. His writing stands out for its clarity, structure, and focus on delivering value.
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