Best 2 Year Fixed Rate Mortgage

2 year fixed rate mortgages explained

A two year fixed rate mortgage is a mortgage that keeps the same interest rate for the first two years that you have it, no matter how much the lender raises or lowers its rates of interest. After two years, the interest you pay will transfer to your lender's standard variable rate (SVR).

If you fix your mortgage for 2 years then your monthly payments will not change for the duration of your two-year introductory term. Variable mortgage types can increase their rates any time, which will increase the amount you need to pay your lender. If you find a good rate on a two-year mortgage, you can commit to spending only the fixed amount for two years before your lender can change your rate. This can offer peace of mind since you don't need to worry about rising rates. However, if mortgage rates go down, you will still be required to pay the fixed amount you agreed with your lender!

A two year fixed term gives the assurance your interest rate and monthly mortgage payment will not change for the next two years. Compared to longer term fixed products it allows you to reassess your mortgage sooner, whereas a five year mortgage or a ten year mortgage would require you to wait for longer.

If you've decided that a two-year term fixed rate mortgage is for you, there's still plenty of options to consider. Primarily; the mortgage rate. This is determined by the size and value of the property, as well as your credit score and the size of your deposit. Generally, the more money you can put down for a deposit, the better your mortgage rate will be, since you present less of a risk to the lender.

Keep an eye out for fees! Some of the lower priced two-year fixed rate mortgage rates may look very appealing, but they can come with an expensive arrangement fee, which can sometimes undo any benefit you would enjoy from the lower rate.

Fees and other charges. As always, read the small print! Always sit down and work out how much you will be charged at the beginning of your mortgage, and when your mortgage ends. It's also worth discovering how much you will be charged if you must cancel - even if you never do it, it's better to be prepared. Work out the full cost of your mortgage including all fees when you compare.

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

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