Two-year fixed rates
Two-year fixes are the most popular choice in the UK and typically offer the lowest initial rates. They suit borrowers who want to reassess their options relatively quickly, perhaps because they expect to move home, pay off a large chunk of the mortgage, or think rates might fall.
The downside is that you will need to remortgage every two years, which means arrangement fees, potential valuation costs, and the time spent comparing deals. Over a 25-year mortgage, these costs add up. You are also exposed to rate changes more frequently, which can go either way.
Two-year fixes make the most sense in a falling or uncertain rate environment, or if your circumstances are likely to change in the near future. If stability is your priority, a longer fix may be better value even at a slightly higher rate.
Three-year fixed rates
Three-year fixes sit between the flexibility of a two-year and the stability of a five-year deal. They are less common but can be a good compromise for borrowers who want a bit more certainty without committing to a longer period.
The rate premium over a two-year fix is usually modest, and you save on remortgaging costs by not having to switch as frequently. Three-year fixes can be particularly attractive when the gap between two and five-year rates is large, as they capture some of the stability benefit at a lower cost.
Five-year fixed rates
Five-year fixes have grown significantly in popularity and now rival two-year deals as the most common choice. They offer a longer period of payment certainty and fewer remortgage events over the life of the loan, saving on fees and administrative effort.
The initial rate on a five-year fix is typically 0.2–0.5 percentage points higher than an equivalent two-year deal, but this gap can narrow or widen depending on market conditions. In periods when rates are expected to rise, five-year fixes can actually be cheaper than two-year deals.
Five-year fixes are well suited to borrowers who value stability, plan to stay in their property for at least five years, and want to minimise the time and cost of frequent remortgaging. The early repayment charges apply for longer, so they are less suitable if you might need to sell or make large overpayments.
Ten-year fixed rates and beyond
Ten-year fixes offer the longest period of certainty available from most UK lenders. They are relatively niche but have gained traction among borrowers who want to lock in a rate for a substantial portion of their mortgage term, particularly in low-rate environments.
The rate premium for a ten-year fix is higher than shorter terms, and the early repayment charges apply for the full decade. However, some ten-year products reduce or remove the ERC after five years, offering a partial exit route if your circumstances change.
Ten-year fixes suit borrowers with a long-term view who are settled in their property and prioritise absolute payment certainty. They are also worth considering if current rates are historically low and you want to protect yourself against the possibility of significant rate rises over the next decade.