What is the difference between 2 and 5 year fixed rate mortgage ?
What is difference between 2 and 5 year fixed rate mortgage, is a question a lot of potential, and current, homeowners might be wondering.
It comes as there are signs of a ‘positive change’ in the mortgage market as fixed rates fell for the second month in a row, according to data from Moneyfacts (Oct 10th 2023).
Rachel Springall, finance expert at Moneyfacts, said: “Fixed mortgage rates have fallen across the spectrum, signalling a positive change in the market.
“These are encouraging signs for borrowers who may be looking for a new fixed rate deal, but they still may be on the fence about locking in, hoping rates will fall further in the weeks to come.”
What is difference between 2 and 5 year fixed rate mortgage ?
MD of Mortgage Medics Sam Murphy explains what the difference is between the two, saying: “Other than the obvious length of fixed rate, there are a few key differences between 2 and 5 year fixed rates which may impact your decision on which offering you go for.
“The interest rate of a 2 and 5 year have become more similar in recent years, with sometimes the 5 year rates, being lower than 2 years, however it’s all about the rate
2 year fixed rates are perfect for short term commitment, whether that be you are planning to move, or make significant changes to your situation, being on a 2 year fixed can allow you the flexibility to make changes without the penalty charges, as waiting for a 2 year fixed to end is much easier than waiting on your 5!
“That being said, 5 year fixed rates can help you beat those remortgage woes, the thought of remortgaging every 2 years is enough to fill many with dread, and having 5 years without remortgaging is great for many.
“If you’re unsure on which deal is right for you, we’ll talk you through your options so you can make an informed decision.
“Think carefully before securing debt against your home. Your property may be repossessed if you do not keep up repayments on your mortgage.”