A two year fixed rate mortgage deal allows you the security of set payments but gives you the flexibility to re-mortgage after only two years.
What's more, choose your deal carefully and you may be able to secure a hugely competitive interest rate that gives you relatively low initial payments.
In general, the shorter the period you wish to fix for, the lower the rate you will get. For this reason, some extremely low interest rates are available on 2 year fixed mortgages
If you need to borrow less than 70% of your property's value it's likely that you'll be able to secure the most competitive rates on your 2 year mortgage.
However, even if you need to borrow 90% of your home's value, finding a relatively cheap fixed rate mortgage deal should still be possible.
When you're carrying out your 2 year fixed rate mortgage comparison you shouldn't automatically assume that the best mortgage is the one with the lowest interest rate.
Fixed rate deals often have higher arrangement fees than other mortgages, so check how the fees differ between available deals. Finding the best mortgage deal is more about comparing the overall cost - including all fees and charges - as opposed simply going for the deal that seems least costly on the surface.
Unlike discounted or tracker mortgages, early repayment charges are likely to apply for the duration of the fixed rate period.
Penalties may also be applied if you make significant overpayments so make sure you take this into consideration and carefully check the terms and conditions of any deal you consider applying for.
Also, some lenders will extend early repayment charges beyond the end of a fixed rate period, so check this carefully. Otherwise you may find that your fixed rate period ends and you are faced with the unpalatable choice of either paying the penalty in order to re-mortgage, or paying an uncompetitive standard variable rate until the penalty period has ended.
A competitive mortgage deal for 2 years for someone who is self employed should be relatively easy to find, providing you have a couple of years' trading behind you.
Most mortgage deals are available to the self-employed, although it is rare nowadays to find a lender willing to lend on a self-certification of income basis. Instead the self-employed can expect to have to provide evidence of income via accounts or tax returns in order to obtain any other type of mortgage.
However, irrespective of whether you're self employed or not, make sure you meet the eligibility of any mortgage deal you're interested in before you apply so you don't get rejected unnecessarily.
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