A fixed-rate mortgage keeps your interest rate and monthly payments the same for a set period. With a two-year fix, you’ll know exactly what you’ll pay for the next 24 months.
Fixed rates often start higher than variable rates, but they offer payment stability, whereas variable payments can rise if interest rates increase. The downside is that if rates fall, you won’t benefit.
A 2-year fix is one of the shortest terms available in the UK, though longer options like 5- and 10-year fixes exist. Leaving a fixed deal early usually means paying an early repayment charge (ERC).
Many lenders allow some penalty-free overpayments (often up to 10% of your balance per year), which can be useful if you want to reduce what you owe before your fixed period ends.
How much you can borrow on a 2 year fixed-rate mortgage will depend on your personal circumstances. Lenders have specific criteria they use, whether you’re opting for a fixed or variable interest rate.
Banks and building societies will consider how big your deposit is and use a multiple of your monthly salary to determine what they will offer you.
Typically, providers offer loans worth four or four-and-a-half times your income. For example, if you earn £50,000 a year, you should be able to borrow around £200,000. They’ll also take affordability into account and look at any other debts and loans and may factor in financial commitments such as child maintenance.
You can use our mortgage calculator to work out roughly how much you might be able to borrow.
The bigger your deposit, the lower the LTV ratio and usually the better the rate you’ll get. If you can save up a little more, you might find it saves you quite a bit of money in the long term.
If you have a small deposit, speak to a mortgage broker who can look at deals from across the market to make sure you get the best rate for you.
Once your fixed rate comes to an end, you’ll be moved onto your lender's standard variable rate (SVR).
These vary from lender to lender, but they’re often costly – especially if interest rates have risen. Explore remortgaging options around six months before your deal ends to avoid being moved onto it.
Don’t forget to consider fees and charges alongside the headline rate.
Things to consider include whether you’re allowed to overpay (and by how much), early repayment charges (ERCs), valuation fees, and arrangement or broker fees.
The bigger your deposit, the lower the LTV ratio and usually the better the rate you’ll get. If you can save up a little more, you might find it saves you quite a bit of money in the long term.
If you have a small deposit, speak to a mortgage broker who can look at deals from across the market to make sure you get the best rate for you.
Once your fixed rate comes to an end, you’ll be moved onto your lender's standard variable rate (SVR).
These vary from lender to lender, but they’re often costly – especially if interest rates have risen. Explore remortgaging options around six months before your deal ends to avoid being moved onto it.
Don’t forget to consider fees and charges alongside the headline rate.
Things to consider include whether you’re allowed to overpay (and by how much), early repayment charges (ERCs), valuation fees, and arrangement or broker fees.
When your 2-year fixed-rate period finishes, you can either:
1. Stay on the lender’s Standard Variable Rate (SVR)
If you do nothing, you’ll move onto the SVR automatically.
This rate is often higher than your fixed rate and rarely the cheapest option.
Benefits: usually no early repayment charges and flexible, often allowing unlimited overpayments.
Can be useful short-term if you’re planning to move soon.
2. Switch to a new deal with your current lender (Product Transfer)
You can choose another fixed or variable rate without changing lenders.
Many lenders now let you secure a new deal 4–6 months before your current one ends.
It’s convenient, but not always the cheapest option — a whole-of-market broker can check if better rates exist elsewhere.
3. Remortgage to a new lender
You move your mortgage to a different lender offering a better deal.
Start exploring options around six months before your fixed rate ends.
Most offers last six months, allowing you to lock in a new rate and avoid ERCs.
A mortgage broker can help compare deals and find the best fit.
Yes, but your lender may charge you fees for doing this. This is known as an early repayment charge (ERC). This can amount to thousands of pounds.
If you are trying to switch to another mortgage deal, this charge could still be less than the savings you expect to make by switching so do your sums carefully.
Some lenders offer mortgages with no fees, but the interest rate may be higher as a result.
The vast majority do charge fees, so make sure this is factored into your calculations. Check the total cost of the mortgage over the two years to find the cheapest deal.
