What you need to know about 2 year fixed rate mortgages
With the interest rate currently still being set at 0.5% and with rises being a real possibility over the next couple of years it is certainly an attractive option of having your interest rate fixed so that you are not immediately affected by any interest rate rises. There are a number of mortgages available that have fixed rates of various lengths, with a 2 year fixed rate being one of the most common.
Why choose a 2 year fixed rate mortgage?
One of the best reasons for choosing a 2 year fixed rate mortgage is that these mortgages usually have the lowest interest rates of all mortgages. The reason for this is because you only have the rate for 2 years before you then revert to your lender’s standard variable rate. In the current market, there is a large selection of 2 year fixed rate mortgages around.
2 year fixed rate mortgages are ideal for anyone who may be in a position at the end of the two years to then make a significant overpayment. This is because making more than a 10% overpayment during your fixed rate period will almost always incur charges that can be quite significant. A 2 year fixed rate mortgage is also useful if you may be moving house in a couple of years, especially if you are not able to port your mortgage as if you redeem your mortgage during the fixed term you will have to pay an early redemption fee.
Things to think about
Although 2 year fixed rate mortgages offer you the lowest interest rates you do have to consider the application fee as well when you are looking at the cost of your repayments. Many 2 year fixed rate mortgages have a high application fee, which in some cases can be up to £2000. Therefore before you commit to applying for a mortgage you should ensure that you get a total cost calculation, which includes the application fee as well as your monthly repayments, in order to make your decision. Although you can make these calculations yourself, it is easier for you mortgage broker to do this for you as they have all of the information at their fingertips and they are also very experienced in carrying out this type of calculation and so will not make any mistakes. The cost of the mortgage application is particularly relevant if you are remortgaging.
View 3 year fixed rate mortgage deals
View 5 years fixed rate mortgage deals
Related mortgage product pages
95% mortgages for first time buyers | 90% mortgages | 85% mortgages | 80% mortgages | 75% mortgages | 70% mortgages | Mortgage Broker | Mortgage Calculator
Related fixed rate mortgage deals
2 year fixed rate mortgages | 3 year fixed rate mortgages | 5 year fixed rate mortgages | 10 year fixed rate mortgages | Compare all fixed rate mortgages
Related mortgage articles