Wednesday 22 August 2018

How to choose between 2, 5 or 10 year mortgages based on your circumstances

Author: Editorial Team

Mortgage length

While interest rates remained at an all-time low, many borrowers saw little point in fixing their mortgages for a long period of time. A lot of people opted for mortgages with rates that were fixed for just two years, with the view that this short-term commitment gave them more flexibility and the chance to remortgage on even more favourable terms if rates remained the same or fallen lower.

However, with interest rates now slowly creeping up, five, or even ten-year mortgages are beginning to look like much better deals. If you’re currently hunting for your next property, or if you’re thinking about remortgaging your current home, here are a few things to consider before you sign on the dotted line.


When it comes to selecting a period for your mortgage, it often comes down to finding a balance between short-term affordability and long term peace of mind. Often, the shorter the fixed-term period of your mortgage is, the better your rate will be. This is because lenders have a better idea of how the market will perform over the next 24 or 36 months and so can be confident they won’t lose too much money on your loan. Yet as ThisIsMoney points out, there are other considerations:

In general, the longer you fix for, the higher your monthly repayments. However, there are many advantages to fixing for longer, such as shielding against an interest rate rise and providing stability of repayments.”

If you need your mortgage payments to be very affordable for the first few years after you purchase your home, opting for a two or three-year fixed term may be your best option. However, if you want to know exactly how much you’re going to pay every month for longer – and protect yourself against rising interest rates – a five or 10-year term may suit you better.


Although it may be possible to sell your property or change the terms of your loan before your fixed period is up, this can incur fines and extra charges. In general, it’s better to wait until after your fixed period has expired before you sell or make any other major changes to your mortgage’s arrangement. If you’re not sure what your plans are over the coming years, you may want to avoid locking yourself into a 10-year deal. However, if you’re confident you’re going to stay in your property for the next decade, opting for a long fixed rate period could help to give you peace of mind.

With interest rates set to go up in the coming years, the question of how long to fix a mortgage for is something most homeowners are going to have to think about. By putting some serious thought in now, you can ensure you make the right decision when the time comes. Get in touch with our expert advisors today to find out more.

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Written by: Editorial Team