How Long Should I Fix My Mortgage For

How long should i fix my mortgage for

This page was last updated in July 2022. 

How Long Should I Fix My Mortgage For in 2022

What is a fixed term mortgage?

A fixed mortgage is one agreed with a mortgage broker with a fixed interest rate for a specific length of time, usually two to five years. This means that your monthly payments will stay the same throughout the fixed term, providing you with confidence and security.

With fixed rates, you can choose to make repayments on a principal and interest basis or just interest only. For most borrowers and especially for first time buyers, the main question to mortgage brokers is how long to fix.

How does a fixed term mortgage work?

A fixed mortgage works by the lender agreeing to give the mortgage borrowers a set interest rate for a specific period of time. This could be for 2, 3 or 5 years, and during this time, your monthly repayments will stay the same.

Even if market rates change, you won’t have to worry about your payments going up if rates of interest rise because your interest rate will be locked in.

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What are the benefits of having a fixed rate mortgage?

The main benefit of a having fixed rate mortgage deal, as opposed to a tracker mortgage or variable rate, is the security it offers. You will know exactly how much you have to pay each month for the duration of the fixed interval, so you can budget effectively.

If rates of interest rise throughout your term, you’ll still be paying the lower, set rate that you agreed to at the start. Over time, this may save you a significant amount of money.

What are the disadvantages of a fixed term loan?

One potential disadvantage of a fixed term loan is that if rates of interest fall during your mortgage term, you’ll still be stuck paying the higher, fixed rate.

However, most individuals would prefer to make a trade-off for the potential for lower payments in exchange for the assurance and peace of mind that comes with knowing exactly how much you’ll need to pay each month.

What are the alternatives to having fixed rate mortgages?

If you’re not sure whether a fixed rate loan is right for you, there are a few other options to consider.

An alternative to a fixed rate mortgage is an adjustable rate mortgage (ARM). With an ARM, your rate of interest changes along with market rates. This means that monthly payments could increase or decrease, depending on the direction of the rate of interest (set by the Bank of England).

If you’re considering an ARM, it’s important to be aware of the potential risks involved. If interest rates rise, your monthly payments could become unaffordable. However, if you think interest rates will fall or stay relatively stable, an ARM could save you money in the long run.

Another option is a variable rate mortgage. 

Variable rate mortgages work similarly to an ARM in that your rate of interest will fluctuate along with market rates. With a variable rate mortgage, your payments will go up and down along with changes in the Bank of England base rate. This can make it more difficult for you to budget each month.

This type of mortgage can be a good option if you’re comfortable with the idea of your rate of interest changing over time. However, it’s important to remember that if interest rates rise, you could end up paying more than you would with a fixed rate mortgage.

Should I get a variable or fixed rate mortgage?

The answer to this question depends on your individual circumstances and generally on an affordability assessment. If you’re comfortable with the idea of your rate of interest changing, variable rate mortgages could be a good option. 

However, if you prefer the security of knowing exactly how much you’ll need to pay each month, a fixed rate mortgage may be better for you.

Speak to a mortgage specialist to learn more about which type of mortgage would be best for you.

Should I fix my mortgage now?

The answer to this question depends on market conditions at the time you’re considering fixing your mortgage. If rates of interest are low, it may be a good time to lock in a rate for a longer period of time. However, if interest rates are high, you may want to consider a shorter fixed interval.

For how long should I fix my mortgage?

The length of time you choose for your fixed mortgage rate period will depend on your personal circumstances and your confidence in interest rate changes. If you want the security of knowing exactly how much you’ll need to pay each month, then a longer fixed term may be the right option for you.

If you’re happy to take a bit more of a risk in exchange for the potential to save money if interest rates drop, then a shorter fixed term may be the best choice. Ultimately, it’s up to you to weigh up the pros and cons and decide what’s best for you.

When deciding how long to fix your mortgage for, there are a number of factors to consider. It’s important to speak to a mortgage specialist to learn more about which type of mortgage would be best for you before making a decision.

There are a number of factors to consider when deciding how long to fix your mortgage for.

‍should i fix my mortgage

How long do you intend to remain in your property?

In the case that you are planning on selling your property in the near future, a shorter term may be the best option. This way, if interest rates drop, you’ll be able to take advantage of lower rates when you refinance.

On the other hand, if you’re planning on staying in your property for the long term, a longer term could be a good choice. This will give you the security of knowing exactly how much your monthly mortgage payments will be for an extended period of time.

What are market conditions like?

If interest rates are currently low, it may be a good idea to lock in a low rate for a longer period of time. However, if they are high, you may want to consider a shorter term.

This way, if rates fall, you’ll be able to take advantage of lower rates when you refinance.

"A fixed mortgage is one agreed with a mortgage broker with a fixed interest rate for a specific length of time, usually two to five years. This means that your monthly payments will stay the same throughout the fixed term, providing you with confidence and security."

Other market conditions which are worth noting are the employment rate, inflation and the mortgage market. If the employment rate is high and inflation is low, this generally indicates that the economy is doing well. This could be a good time to take out a longer term loan as rates are likely to stay low for an extended period of time.

On the other hand, if the unemployment rate is high and inflation is also high, this often indicates that the economy is struggling. In this case, it may be a good idea to choose a shorter term so you’re not locked into high-interest payments for an extended period of time.

Are you comfortable with risk?

Whether or not a hike in interest rates will have an impact on your mortgage is decided based on the type of mortgage you’re taking out. If you’re taking out a variable rate loan, your rate of interest is likely to rise. If you’re on a tracker mortgage, it’s pretty certain that it will. 

However, if you have a fixed-rate loan and it extends for more than one year, your payment won’t change until the end of the fixed rate period.

how long should i fix my mortgage for

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If you’re happy to take on a bit more risk in exchange for the potential to save money if interest rates plummet, then a shorter fixed term may be the best choice.

If you prefer the security of knowing exactly how much you’ll need to pay each month, then a longer fixed term may be the right option for you.

What is your financial situation?

If you’re comfortable with the idea of your rate of interest changing, a variable rate mortgage could be a good option. However, if you prefer the long term security for your future plans of knowing exactly how much you’ll need to pay each month, a fixed mortgage rate may be better for you.

Consider your financial situation and decide what type of mortgage would best suit your needs.

Fixing your mortgage can offer some advantages and disadvantages depending on your individual circumstances. It’s important to speak to a mortgage specialist to learn more about which type of mortgage would be best for you before making a decision.

How much can you afford to pay?

The answer to this question depends on your individual circumstances. You’ll need to consider your current financial situation and what you can afford to pay each month before deciding how long to fix your mortgage for.

Remember, if you choose longer fixed terms, your payments will be higher. However, you’ll have the security of knowing exactly how much you’ll need to pay each month.

Alternatively, if you go for a shorter fixed term, your payments will be lower. But, if the interest rate rises, your payments could increase.

What about overseas buyers and buy to let owners?

If you’re an overseas buyer or buy to let owner, you may want to consider a shorter fixed term. This way, if interest rates fall, you’ll be able to take advantage of lower rates when you refinance.

2 year or 5 year mortgage

What flexibility could I get with a fixed rate mortgage?

With a fixed rate mortgage, most lenders will allow you to make overpayments without an early repayment charge. However, on some fixed rate deals, early repayment charges apply. 

You may also be able to take a payment holiday in some cases.

It’s important to speak to your mortgage lender to learn more about early repayment charges and the flexibility they offer with fixed rate mortgages, and whether you would be subject to an early repayment charge.

The benefits of a longer fixed rate full mortgage term

You’ll have the peace of mind of knowing exactly how much your repayments will be for the next few years. This can make budgeting easier and help you to plan for the future.

In the case of an interest rate rise during your fixed period, you’ll still be paying the lower, fixed rate. This could save you a significant amount of money over the life of your mortgage.

The benefits of a shorter fixed rate mortgage term 

If interest rates drop during your fixed term deal, you’ll be able to take advantage of lower rates by refinancing. This could save you money in the long run.

A shorter fixed period may have a lower interest rate than a longer term mortgage. This could reduce your mortgage repayments.

What happens at the end of the fixed term?

When your fixed rate period ends, your mortgage will revert to what’s called a variable rate mortgage based on your lender’s standard variable rate (SVR). This means that you might end up making lower or higher repayments, depending on changes to the Bank of England ‘base rate’ and how this affects your lender’s SVR.

If you’re on a standard variable rate mortgage, you may be able to remortgage to a new fixed rate deal when your current deal ends. This could give you the security of knowing exactly how much your repayments will be for an extended period of time.

how long can you have a mortgage for

What should I do if I’m ready to fix my mortgage?

If you’re ready to fix your mortgage, before you make your mortgage application, you’ll need to consider mortgage options from many lenders, and you should speak to a mortgage specialist or mortgage expert to negotiate a new deal. They’ll be able to help you compare different mortgage deals and find a better deal for you.

When you’re ready to compare mortgage deals, make sure you use a mortgage calculator to get an estimate of how much you could borrow and what your monthly repayments might be. 

This will help you budget for your new mortgage and find the cheapest deals.

You can also employ an affordability calculator to see how much you can afford to pay each month. This will aid you in narrowing down your search to find the best mortgage deal for you.

How to find the best deal on a fixed rate mortgage

If you’re looking for the best mortgage rates, it’s important to compare a range of different deals from different mortgage lenders in the financial services register, not just look for a new mortgage deal from your current mortgage provider.

Make sure you use a mortgage comparison service to compare deals from a wide variety of lenders.

You can also consult mortgage advisers or use a mortgage affordability calculator to get an estimate of how much you could afford to pay each month. This will help you narrow down your search and find a cheaper deal and the best mortgage rates for you for borrowing money. 

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Learn More About Mortgages In The UK

How do mortgages work in the UK?

Buying a home or land is expensive. A mortgage is a financial product that helps people purchase their own home or land.This is especially true for a first time buyer, as it might be the only route onto the property ladder.

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ou can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

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A fixed term contract is a way of describing certain types of employment. If your current employment contract is due to end after a certain period of time, or after a specific piece of work is complete, you are likely on a fixed term contract. 

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After sending off the final application waiting for the decision can be frustrating. Many prospective homeowners ask ‘how long does it take?’ but the truth is the mortgage approval process is always different for each customer.

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The entire conveyancing process will normally take anywhere between 8-12 weeks, however you should be prepared for this to take much longer depending on your circumstances and wider factors. This articles explores what the timescale involves.

Mortgages if You are bankrupt

There is no hard and fast rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. They will lend to discharged bankrupts and consider each case individually. 

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Everyone wants to get the best deal when it comes to buying a home and getting a mortgage when they buy a home. However, being too ambitious can lead to your application being rejected. 

how much do mortgage advisors charge?

Fees for mortgage brokers can be off-putting. A mortgage is an expensive financial product, and often buyers want to save as much money as possible. This might limit their options when it comes to using a mortgage broker.  However, not everyone advisor charges a fee.

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When you have an IVA, mortgage acceptance is still possible. However, involuntary agreement mortgage lenders can be hard to find. Typically, a high street company will be more less keen to give you a mortgage. 

Article author

Katy Davies

I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch.   I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.

Outside of work, I love the snow and am a keen snowboarder.  Most winters you will see me trying to get away for long weekends to the slopes in Switzerland or France.

Email – katy@helpandadvice.co.uk

Frequently Asked Questions

How does a fixed term mortgage work?

A fixed mortgage works by the lender agreeing to give the mortgage borrowers a set interest rate for a specific period of time. This could be for 2, 3 or 5 years, and during this time, your monthly repayments will stay the same.

What are the disadvantages of a fixed term loan?

One potential disadvantage of a fixed term loan is that if rates of interest fall during your mortgage term, you’ll still be stuck paying the higher, fixed rate.

Should I fix my mortgage now?

The answer to this question depends on market conditions at the time you’re considering fixing your mortgage. If rates of interest are low, it may be a good time to lock in a rate for a longer period of time. However, if interest rates are high, you may want to consider a shorter fixed interval.

What about overseas buyers and buy to let owners?

If you’re an overseas buyer or buy to let owner, you may want to consider a shorter fixed term. This way, if interest rates fall, you’ll be able to take advantage of lower rates when you refinance.

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