A five year fixed rate mortgage will protect you against potential interest rate rises, but is it worth it?
If you choose a fixed mortgage over a variable one your mortgage repayments will remain fixed for the length of the agreement. You can use our comparison tables to compare and find the best five year fixed rate mortgages for you.
Benefits of a 5 year fixed rate mortgage
Five year fixed rate mortgages are popular with borrowers as monthly repayments remain fixed for a five year period.
This means that if interest rates increase your monthly repayments will remain the same. This puts an end to any nasty surprises and can help you plan for the future.
Knowing exactly how much you’ll be paying every month can make it much easier to budget your finances and work out how much money you will have left over.
What happens when the five year period is over?
Once you reach the end of your five year period your mortgage payments will no longer be fixed.
You will then be moved to the mortgage lender’s SVR which stands for Standard Variable Rate. This could be higher or lower than the rate you payed during your fixed period.
Disadvantages of a fixed rate mortgage
The disadvantage is that there is usually an administration fee to pay when the mortgage is arranged by your chosen lender.
Five year fixed rate mortgages also often come with a higher arrangement fee than two year fixed rate deals.
- Fixed Rate Or Variable Rate Mortgages Choosing between a fixed and a variable rate mortgage is one of the most fundamental decisions faced by homeowners
- Loan to Value Learn all about what LTV means and how it can help you find the right mortgage for you
- Home buying costs Read our guide to find out all the extra costs involved in buying a house