Fixing? Two-year or five-years?

Two-year fixed mortgages could become cheaper than five-year deals in 2025*.

Typically, longer fixed mortgage deals are more expensive than two-year deals due to uncertainty surrounding interest rates in the long-term. However, since Liz Truss’ Mini Budget in 2022, five-year fixed mortgages have been the cheaper option; interest rates have been higher, so there has been an expectation that they will start to drop.  But, if the Bank of England makes further reductions to Bank Rate this year, experts anticipate that two-year fixes will fall below five-year deals.  Borrowers may therefore be faced with a dilemma about which deal to choose.

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Your home may be repossessed if you do not keep up repayments on your mortgage

*iPaper, 2025