Should You Fix Your Mortgage for 2 or 5 Years in 2026?

Choosing between a two or five year fixed mortgage comes down to flexibility versus certainty. A two year fix lets you benefit sooner if rates fall, while a five year fix offers longer term security but may cost more if rates drop.

What is a fixed rate mortgage?

A fixed rate mortgage is a home loan where the interest rate and monthly payments stay the same for a set period, offering homeowners stability and making budgeting easier.

This differs from variable rate mortgages where the rate you pay can fluctuate. For example, if you take out a fixed rate mortgage at 4%, your monthly repayments stay the same even if the Bank of England base rate changes.

2 or 5 year fixed mortgages are the most common, but you can also get fixed deals for 3 years, 10 years or even longer. Fixed rate deals are by far the most popular type of mortgage, with 85% of outstanding mortgages being fixed rate compared to 7% on tracker mortgages.

2 year vs 5 year fixed mortgages

• A 2 year fixed rate mortgage means your rate stays the same for 2 years.

• A 5 year fixed rate mortgage locks in your rate for 5 years.

Pros of a 2 year fixed deal

• Your mortgage payments stay the same for 2 years, helping you budget.

• If mortgage rates improve, you can remortgage onto a cheaper deal sooner.

• Shorter commitment is useful if you're planning to move home within 5 years.

Cons of a 2 year fixed deal

• If mortgage rates increase, you'll likely pay more when you remortgage.

• You'll face mortgage fees again in two years when remortgaging.

• Your rate won't decrease if the Bank of England cuts interest rates during your fixed term.

At Mortgage Tree, we help clients understand how different mortgage terms align with their financial goals and risk tolerance. Our advisors can model various scenarios to show you exactly what each option could mean for your monthly payments.

Pros of a 5 year fixed deal

• Security of knowing your mortgage payments won't change for 5 years.

• No mortgage fees for another 5 years.

• More time to build equity before remortgaging.

Cons of a 5 year fixed deal

• If mortgage rates fall, you may pay more than necessary for longer.

• Early repayment charges typically apply if you exit early.

• Your rate won't decrease if interest rates are cut during your fixed term.

Key differences to consider

Interest rates and monthly payments

In winter 2026, rates on 2 year fixed deals are generally slightly cheaper than 5 year fixes, though the difference is fairly small.

Early Repayment Charges

Early repayment charges tend to be higher for 5 year fixed rate mortgages compared to 2 year deals. These apply if you remortgage early, pay off the balance, or overpay beyond your lender's allowance.

Market predictions for 2026

While the Bank of England is predicted to make further interest rate cuts in 2026, no one knows how quickly this will happen or how low rates could go. Mortgage Tree's advisors stay on top of market trends and can help you weigh the risks of different rate scenarios against your personal circumstances.

How to choose the right mortgage

Consider your budget

If you'd struggle to afford higher mortgage payments should rates increase, you may prefer the security of a 5 year fix. However, if you have more financial flexibility, a 2 year fix allows you to take advantage of potentially lower rates sooner.

Think about your plans

If you plan to move house within the next few years, a 2 year fixed mortgage gives you more flexibility. Even with portable mortgages, there's no guarantee your lender will allow the transfer.

For those staying put long-term, a 5 year fix provides stability and protection from rate increases.

Compare with variable deals

You might also consider tracker or discounted variable rate mortgages. These can benefit you if rates fall but your payments can also increase.

Who is each mortgage best for?

A 2 year fix may suit you if:

• You want flexibility in case rates fall

• You plan to move house in the medium term

• You expect to receive money to pay off part of your mortgage soon

A 5 year fix may suit you if:

• You want long-term budgeting certainty

• You have limited room in your budget for payment increases

• You bought with a small deposit and need time to build equity

Buy to Let investors

For Buy to Let properties, consider that a 2 year fix offers flexibility for portfolio growth or property sales, while a 5 year fix provides certainty over rental yield calculations. However, Buy to Let mortgage fees can be substantial, so factor in the cost of remortgaging every 2 years.

Deciding between a 2 or 5 year fixed mortgage? Mortgage Tree's expert advisors provide fee-free guidance tailored to your circumstances. We'll help you find the right mortgage option for your needs. Contact us today.