2 year fixed rate mortgages

Some two-year fixed-rate mortgages can be taken out with a very small deposit, say 5% of the property’s value. However, as with all mortgage borrowing, the bigger your deposit, the better the interest rates you’ll be offered by lenders. The best rates are usually available for buyers with a deposit in excess of 40% of the purchase price.

How much you can borrow will depend on your circumstances. Lenders have specific criteria, regardless of whether you’re opting for a two-year fixed-rate or a five-year variable-rate deal. Factors that impact how much you can borrow include:

Not necessarily; fixed-rate mortgage deals are often more expensive than similar deals charging a variable rate of interest at the start. However, they offer more security, as the rate you pay will not change even if interest rates go up. They can therefore prove cheaper over the longer term if interest rates rise during the fixed-rate period. If, however, interest rates fall, you could end up on an uncompetitive rate. 

Yes, you can take out a buy-to-let mortgage that has a fixed rate for two years. You can check out the deals available with our handy comparison tool.

Taking out a mortgage involves paying various fees. These can include a booking fee of up to about £250, an arrangement fee, which can range from £0 to more than £2,000, and an administration fee of around £100 to £300. You’ll also have to pay ERCs if you want to pay the mortgage off early, for example to switch to a cheaper deal. These can be up to 5% of the amount owed. When you exit the mortgage, you may also have to pay an exit fee, which can be up to £300. 

When searching for the best 2 year fixed rate mortgage, it’s therefore important to consider the total cost including fees, not just the mortgage rate on offer. The best way to do this is by looking at the total cost over the initial deal period.