Which mortgage to go for? 2 year or 5 year

petr1990

Any advice on which to pick? 

Jemma01

It's hard for people to answer you, the market is unstable, some people speculate the interest rate would go down, others think not.
We also have different circumstances that don't apply to you (how much risk we can take, affordability, do you have dependants to worry about etc). What happens if the interest rate go up after two years!? Can you afford that if you went for 2 years? What happens if the interest rate goes down after two years, do you want to keep paying higher rate for another 3 years!?

We can all tell you what we chose and why, but you need to think about your own situation. I went for a tracker because I just need this debt away from my neck asap, but I have no dependents, I run my business with access to lots of disposable cash, my mortgage is only 30% of the property. 

RelievedSheff

Only you can answer that one.

Do you value the knowledge of your repayments being fixed over a 5 year period? Do you believe mortgage rates will be any lower in 2 years time? Are you planning to stay in your property long term?

Zoe02

Personally went for 2 years fix in February but depends on what you think will happen with interest rates.

worth comparing but found with 5 years, sometimes cheaper opting for the product fee option. 

Jami74

Coming from rented property where the rent increases every year, a mortgage that stays the same every year for five years seems almost too good to be true! I don't care what the interest rates do, I will be between £18k and £28k better off (depending if landlord increases by £100 a year or 10% a year) after 5 years in my new home than if I stay in my current rented home.

Newbie_John

Over 2 years it's only £480 difference.

Would you bet £480 that rates will be lower in 2 years time?

Yes, go for 2 years.
No, go for 5 years.

Anyway, during your mortgage term you will have this question many times and nobody knows for sure what will happen - in 2021 rates were 1% (pandemic), in 2023 they were 7% (russian war), if nothing happens they should go down, if something big happens they may go up.

fergie_

I went for 5y in January. My reasoning was that rates would need to fall a lot for the 2y premium to be worth it. I'd also rather pay as low a rate as possible while the capital is still high.

If the rates were the same or lower, I would have gambled on 2y.

Hoenir

Newbie_John said:

Over 2 years it's only £480 difference.

Would you bet £480 that rates will be lower in 2 years time?

The £480 notional saving could be used to overpay the mortgage for the first two years.