2 Year or 5 year fixed?
Two year or five year fixed rate: what is the difference?
When interest rates hit an all-time low, it’s no wonder people want to jump to secure a fixed rate mortgage. A fixed rate mortgage allows for you to have a fixed mortgage payment each month for the chosen set period, which works particularly well for those who are first time buyers, home movers who would struggle with a rise in monthly payments or for those individuals who just want the comfort of knowing exactly where their finances stand in the near future.
If moving into a property which you intend to live in for quite some time, a five year fixed rate will save the hassle of having to remortgage the property again for that period of time. However, it all depends on what you can afford – generally, the shorter the term, the lower the interest rate you will have to repay. Therefore, a two year fixed term may be more suitable to an individual on a lower income now but hopes to earn more in the future.