A fixed-rate mortgage keeps your interest rate and monthly payments the same for a set period. With a 2-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 give you payment stability — variable payments can rise if interest rates increase. The trade-off is that if rates fall, you won't benefit until your fix ends.
A 2-year fix is one of the shortest terms available in the UK; longer options like 5- and 10-year fixes also 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 a year, which can help you reduce what you owe before your fix ends.
How much you can borrow depends on your personal circumstances. Lenders use their own criteria, whether you choose a fixed or variable rate.
Banks and building societies look at the size of your deposit and use a multiple of your income to decide what they'll offer.
Typically, lenders offer loans worth four to 4.5 times your income. For example, if you earn £50,000 a year, you could typically borrow around £200,000, though this varies by lender and your other financial commitments.
They'll also look at affordability - any other debts, loans, and commitments such as child maintenance.
Use our mortgage calculator to work out roughly how much you might be able to borrow.
A 2-year fix usually costs less upfront and gives you more flexibility to remortgage sooner, which can suit you if:
You expect interest rates to fall over the next couple of years.
You think you might move home or need to change your mortgage soon.
You'd rather review your options more often, even if it means more remortgaging admin.
A 5-year fix usually costs a little more but locks in certainty for longer, which can suit you if:
You want fewer remortgages and more payment certainty.
You expect rates to rise, or want to protect against that risk for longer.
You're not planning to move or change your mortgage in the near future.
Neither is automatically better, it depends on your circumstances and how rates are expected to move. A mortgage broker can help you weigh this up for your situation.
The bigger your deposit, the lower your LTV ratio — and usually the better the rate you'll get. Saving even a little more before you apply could save you a meaningful amount over the life of the deal.
If you have a small deposit, a mortgage broker can search deals across the whole market to help you find the best rate for your situation.
Once your fixed rate ends, you'll move onto your lender's standard variable rate (SVR) unless you switch.
SVRs vary by lender and are often costly, especially if interest rates have risen since you fixed. Start exploring remortgage options around six months before your deal ends, so you're not moved onto the SVR by default.
Look beyond the headline rate.
Check whether you're allowed to overpay (and by how much), any early repayment charges (ERCs), valuation fees, and arrangement or broker fees. These can make a cheaper-looking rate more expensive overall.
The bigger your deposit, the lower your LTV ratio — and usually the better the rate you'll get. Saving even a little more before you apply could save you a meaningful amount over the life of the deal.
If you have a small deposit, a mortgage broker can search deals across the whole market to help you find the best rate for your situation.
Once your fixed rate ends, you'll move onto your lender's standard variable rate (SVR) unless you switch.
SVRs vary by lender and are often costly, especially if interest rates have risen since you fixed. Start exploring remortgage options around six months before your deal ends, so you're not moved onto the SVR by default.
Look beyond the headline rate.
Check whether you're allowed to overpay (and by how much), any early repayment charges (ERCs), valuation fees, and arrangement or broker fees. These can make a cheaper-looking rate more expensive overall.
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 often 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 let you secure a new deal 4–6 months before your current one ends.
It's convenient, but not always the cheapest — 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, letting you lock in a new rate and avoid ERCs.
A mortgage broker can help you compare deals and find the best fit.
Yes, but your lender may charge an early repayment charge (ERC) for doing this, which can amount to thousands of pounds.
If you're switching to another deal, the ERC could still be less than the savings you'd make by switching - so do the sums carefully before deciding.
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.
Yes, most lenders let you overpay, though usually only up to a limit, commonly 10% of your outstanding balance per year, without triggering an early repayment charge.
Check your specific lender's terms, since limits and charges vary.
Nothing changes to your payments, that's the point of a fixed rate. Your rate and monthly payment stay the same for the full two years, whether the Bank of England base rate rises or falls.
You'll only feel the effect of any rate change once your fix ends and you move to a new deal or your lender's standard variable rate.
