Choosing a fixed-rate mortgage comes down to one question: how long do you want to lock in your rate? In September 2026 the average 5-year fix for a borrower with a 25% deposit was 4.98%, below the 5.13% average for a 2-year fix, according to the Bank of England. On a £200,000 mortgage over 25 years, that is £1,166.85 a month against £1,184.38.
With Bank Rate at 3.75%, inflation at 3.5% and the Bank of England's next decision due on 5 November 2026, the right choice depends on where rates go after your fix ends, on how big your mortgage is, and on how settled your plans are. This article works through each, with the figures for a typical mortgage.
How to compare a 2-year and a 5-year fix
You can compare fixed-rate mortgages in two ways:
- Monthly payment: what you pay each month while the fix lasts. It is the figure that matters for your budget, and it is set by the rate, the amount you borrow and the term.
- Cost over the same period: the interest (and fees) you pay over a fixed stretch of time. Comparing over five years is fairer, because a 2-year fix is followed by another deal for three more years, and you can't know its rate today.
For example, on £200,000 over 25 years, a 2-year fix at 5.13% costs £1,184.38 a month. After two years you owe £191,694. If you then fix again at the same rate, you pay £48,589 in interest over five years in all. A 5-year fix at 4.98% costs £47,115 over the same five years, £1,474 less, and you avoid paying a second product fee in two years' time.
Do the same sum for your own mortgage, adding each deal's product fee, so you compare deals on what they cost rather than on the headline rate. A fee can be paid up front or added to the loan, in which case you also pay interest on it for the whole term.
Work out your own
Put in your balance, current rate, the new rate, fees and any early repayment charge to see what switching saves over the fixed period.
Open the remortgage calculatorHow 2-year and 5-year fixes compare at today's rates
The cost of a 2-year fix over five years depends on the rate you get when it ends. So the comparison below takes three possibilities: rates one percentage point lower in two years' time, the same as now, or one point higher. It also shows what happens if you take no new deal at all and stay on the lender's revert rate.
The table below shows the monthly payment in years three to five and the total interest over five years on a £200,000, 25-year repayment mortgage, cheapest first.
| Choice | Monthly, years 3 to 5 | Interest over 5 years |
|---|---|---|
| 2-year fix, then rates 1 point lower 5.13%, then 4.13% | £1,076.98 | £42,929 |
| 5-year fix 4.98% for five years | £1,166.85 | £47,115 |
| 2-year fix, then no change 5.13%, then 5.13% | £1,184.38 | £48,589 |
| 2-year fix, then rates 1 point higher 5.13%, then 6.13% | £1,297.08 | £54,287 |
| No deal: the revert rate 6.58% throughout | £1,360.43 | £62,946 |
Source: Bank of England average quoted rates at 75% loan-to-value, September 2026; ComputeNow calculations. Product fees not included; rates in two years' time are illustrations, not forecasts.
At today's rates the 5-year fix wins unless rates fall: a 2-year fix only comes out ahead if the rate you can get in two years' time is below about 4.87%, just 0.26 percentage points under today's 2-year rate. If rates are a point higher by then, the 2-year route costs £7,172 more in interest over five years, and your payment would jump from £1,184.38 to £1,297.08 a month.
Taking no new deal is by far the most expensive choice. At the average revert rate of 6.58% you would pay £1,360.43 a month and £62,946 in interest over five years, £15,831 more than on the 5-year fix.
What the choice is worth at different mortgage sizes
The rates don't change with the size of your loan, so the break-even point stays at about 4.87% whatever you borrow. What changes is how much is at stake. The larger the mortgage, the more a 5-year fix saves if rates stay put, and the more a 2-year fix costs you if they rise.
| Borrowed, 25 years | 2-year fix a month | 5-year fix a month | 5-year saves over 5 years | If rates rise 1 point |
|---|---|---|---|---|
| £100,000 | £592.19 | £583.43 | £737 | £3,586 |
| £150,000 | £888.28 | £875.14 | £1,105 | £5,379 |
| £200,000 | £1,184.38 | £1,166.85 | £1,474 | £7,172 |
| £300,000 | £1,776.57 | £1,750.28 | £2,211 | £10,758 |
| £400,000 | £2,368.76 | £2,333.70 | £2,947 | £14,344 |
Interest saved by the 5-year fix over five years, against a 2-year fix followed by the same rate, or by a rate one point higher. Product fees not included.
Fees work the other way. A fixed fee is a bigger share of the cost on a small mortgage, so on a loan of £100,000 a deal with no fee and a slightly higher rate can be cheaper overall than the lowest rate with a fee. On a mortgage of £400,000 the rate usually matters more than the fee.
How your loan-to-value changes the rate
Your loan-to-value (LTV) is your mortgage as a share of your home's value. Lenders price deals in bands, and the lower your band, the lower the rate. In September 2026 the average 2-year fix was 5.01% at 60% loan-to-value, against 5.13% at 75%. On £200,000, that is £14.03 a month less.
This is the main reason a shorter fix can still make sense: it lets you move into a cheaper band sooner. But repayments alone move you slowly. On our example, two years of payments take your mortgage from £200,000 to £191,694, so your loan-to-value only falls from 75% to 71.9%. To reach 60% without overpaying, the home would need to rise in value by about 20%; average UK house prices rose 0.9% in the year to August 2026, according to the ONS.
So a 2-year fix pays off on this count mainly if you can make a large overpayment, or your home has risen in value a lot, by the time it ends. Check your own figures: your balance after the fix, and a realistic value for your home.
Where interest rates are heading
Bank Rate, the Bank of England's base rate, is 3.75%. Consumer price inflation was 3.5% in the year to September 2026, above the Bank's 2% target. The Bank's next rate decision is on 5 November 2026. A change in Bank Rate moves tracker and revert-rate payments straight away. Fixed rates don't change, but new fixed deals often move before a decision, because lenders price in what they expect.
Fixed rates follow swap rates, the cost for lenders of borrowing at a fixed rate for the same period. When the markets expect rates to rise in the short term but fall over the following years, 5-year swap rates can sit below 2-year ones, and so can 5-year mortgage rates. That is the position in 2026, and it is why a cheaper 5-year rate isn't a sign that rates won't rise next.
Nobody can predict interest rates reliably, including the markets. The safer approach is to choose a deal you could live with whichever way rates go: work out your payment if rates were a point higher when a short fix ends, and decide whether you'd rather pay for certainty or keep the option of a better rate.
What happens when your fix ends
When a fixed rate ends, your mortgage moves to the lender's revert rate, often called the standard variable rate, unless you take a new deal. At an average of 6.58% in September 2026, that would put the payment on our example up to £1,360.43 a month. You have two ways to avoid it:
- A product transfer: a new deal with your current lender. It is usually quick, often needs no new valuation or affordability check, and has no legal work.
- A remortgage: a new deal with a different lender. It can find a lower rate, but takes longer and usually involves a valuation and legal work, which many lenders pay for.
Leaving a fixed rate early costs money. Most fixes carry an early repayment charge (ERC) for as long as the fix lasts, set as a percentage of what you owe and often falling each year. As an example, a 5-year fix charging 3% in its third year would cost £5,746 to leave after two years, on a balance of £191,518. Your offer sets out the exact charges.
Most deals also let you overpay a share of the balance each year, commonly 10%, without a charge. Overpaying £100 a month on the 5-year fix at 4.98% would save £24,366 in interest over the full term if the rate stayed the same, and clear the mortgage 3 years and 6 months early.
Why the cheaper fix isn't always the right one
A lower rate doesn't make a 5-year fix right for everyone. If you sell, move or repay a large amount during those five years, an early repayment charge can wipe out what you saved on the rate. Many deals can be moved to a new home ("porting"), but the new loan still has to pass the lender's checks, and any extra borrowing may be on a different rate and end date.
Life changes matter too. A new job, a separation, a growing family or a plan to let the property out can all mean changing your mortgage within five years. If any of these is likely, the flexibility of a shorter fix, or of a tracker with no early repayment charges, can be worth more than the lower rate.
Trackers deserve a look if you value that flexibility. They follow Bank Rate plus a set margin, so each 0.25% rise would add about £31.51 a month to a £200,000 mortgage at around today's revert rate, and each cut would save about the same. That works in your favour if rates fall, and against you if they rise.
5 ways to choose the right fix
These five checks narrow the choice to the deal that suits your plans, not only the lowest rate.
1. Work out how long you'll stay put
If there is a real chance you'll move, sell or repay within five years, find out what the early repayment charge would be on a 5-year fix, and whether you could port it. If you expect to stay, the longer fix is cheaper at today's rates.
Be honest about the uncertainty. A charge of a few thousand pounds is a high price for a move you might have made anyway; a few pounds a month more on a 2-year fix is a low price for keeping your options open.
2. Test what a rise would do to your budget
Ask what you could afford if your rate were a point higher when a short fix ends: on our example, £112.70 a month more. If that would stretch you, the certainty of a 5-year fix is worth having.
Remember that other costs move too. With inflation at 3.5%, a mortgage payment that stays the same for five years takes a smaller share of a rising income.
3. Compare the total cost, not the rate
Add the product fee to the payments over the fixed period for every deal you look at. A 2-year fix also means paying a fee again in two years' time, which a 5-year fix avoids.
If you add a fee to the loan rather than paying it up front, you pay interest on it for the rest of the term, so it costs more than it looks.
4. Check your loan-to-value band
Work out your loan-to-value now and at the end of the fix, using your balance after the fixed period and a realistic value for your home. If a cheaper band is within reach, a shorter fix can pay for itself.
If it isn't, there's little reason to come back to the market early: on our example, two years of payments only take you from 75% to 71.9%.
5. Book your next deal early
Whatever you choose, start looking six months before your fix ends. Securing an offer protects you if rates rise, and most lenders let you switch to a cheaper deal if they fall before you complete.
Staying on the revert rate even for a few months is the most expensive option of all: on our example it costs £193.58 a month more than the 5-year fix.
Bottom line
A mortgage rate tells only part of the story. At September 2026's average rates a 5-year fix costs £17.53 a month less than a 2-year fix on £200,000, saves £1,474 in interest over five years if rates don't change, and protects you if they rise. A 2-year fix only comes out ahead if your next rate is below about 4.87%. If you may move, repay a lump sum or drop a loan-to-value band within two years, that flexibility can still be worth paying for, so weigh the early repayment charges alongside the rate.
Tips
- Compare the total cost over the fixed period, including the product fee, not only the rate. On a smaller mortgage, a low rate with a large fee can cost more than a higher rate with no fee.
- Most lenders let you secure a new deal up to six months before your current one ends, so you never need to spend a month on the revert rate. Use the remortgage calculator to see what switching saves.
- Read the early repayment charge table in your offer before you choose a 5-year fix, and note how much you can overpay each year without paying it.
- If you are close to a cheaper loan-to-value band, ask your lender whether a revaluation could move you into it at your next deal.
This guide explains the rules; it is not personal financial advice.