Does a 10 year mortgage cost the same as a 2 year fixed five times?

frostie_2

Hi, I have just read through the question with some detail. Now assuming that there are no fees, or charges incurred. Then in theory yes they would be the same as at interest it's a flat 5%.
If you were paying Capital Repayment as a fixed then it would be different as if you re-moed every 2 years at 5% then at renewel date you would borrow slightly less each time.

However the real question is that as a lender they would never offer you the choice of 2 - 10 years fixed at the same interest rate. They would have the facility to offer you the fixed terms but the interest rates would be different.

Lenders aren't bothered about the fixed period its the Standard Variable Rate afterwards. i.e. If you had the choice from 1 year all the way to 10 years.

1 year would be 5%
2 5.05%
3 5.10%

You get the picture i'm sure. So the longer you fix it for the higher interest rate on the fixed period would be.

So yes in theory 2 or 10 year fixed at 5% would be very similar but in practice would be very different in rates.

hope this helps