Compare the best 2 Year Fixed Rate Mortgages

What is a 2 year fixed rate mortgage?

A two year fixed rate mortgage is, simply, a mortgage that keeps the same interest rate for the first 2 years that you have it, no matter how much the lender raises or lowers its rates of interest. After the initial period of 2 years, the interest you pay will transfer to your lender's standard variable rate (SVR). Fixed rate mortgages can last for a little as 2 or as much as 10 years, but on this page, we will be looking at mortgages 2 year mortgages only.

On this page:

1. 6 of the best 2 year fixed rate mortgages
2. Should I fix my mortgage for 2 years?
3. Who is a 2 year mortgage for?
4. Advantages of a 2 year fixed rate mortgage
5. Disadvantages of a 2 year fixed rate mortgage
6. How to find the best 2 year fixed rate mortgage
7. Alternatives

6 of the best 2 year fixed rate mortgages

1. Yorkshire Building Society
   
   

   	APRC	DETAILS
   Yorkshire Building Society 1.43% Initial Rate 2 year fixed rate mortgage 65% LTV Purchase	4.2%	1.43% Fixed to 31/12/2020 Reverting to a 4.25% Discounted Variable to 31/12/2023 (0.74% disc) Reverting to an Existing Borrowers Rate of 4.99% for the remaining term of the mortgage Max Loan to Value: 65% Purchase Fee: £995 on completion Redemption charge: To 31/12/20: 2.5/1.5% Sum Repaid Exit fees: Deferred arrangement fee £90 Fixed Flexible options include: underpayments, overpayments & payment holidays (T&C apply) Free Valuation fees £250 Cashback Minimum loan: £25,000 Maximum loan: £5,000,000
   Representative Example: £150,000 mortgage over 25 years initially at 1.43% fixed for 24 months reverting to 4.25% variable for 36 months and 4.99% variable for term. 24 monthly payments of £594.98, 36 monthly payments of £795.03 and 240 monthly payments of £846.60. Total amount payable £247,219.60 includes loan amount, interest of £96,085, valuation fees of £0 and product fees of £995. The overall cost for comparison is 4.3% APRC representative.

   Yorkshire have doubled up, with two of their fixed rate mortgages making the top 3 of our 6 of the best mortgages. They have two, two-year fixed rate mortgages specifically for those looking to purchase a new home and both offer cash back and flexibility.

   If your deposit is greater than 35% (65% loan to value mortgage) then you can apply for their 1.43% fixed rate to 31/12/2020 (4.2% APRC), reverting to 4.25% discounted variable to 31/12/2023 and then moves to an existing borrowers’ rate of 4.99% for the remaining term.

   To sweeten the deal even further, Yorkshire BS are offering a cashback incentive of £250. This product also comes with flexible options, such as the ability to overpay, underpay and have payment holidays subject to terms and conditions of Yorkshire Building Society.

2. Hanley Economic Building Society
   
   

   	APRC	DETAILS
   Hanley Economic Building Society 1.55% Initial Rate 2 year fixed rate mortgage 80% LTV Purchase	4.9%	1.55% Fixed to 28/02/2021 Reverting to an Existing Borrowers Rate of 5.44% for the remaining term of the mortgage Max Loan to Value: 80% Purchase, 80% Remortgage Fees: Booking £799 Redemption charge:  To 28/2/21: 2% Sum Repaid Exit fees: Redemption Admin Fee £95.00 Fixed Remortgages free legal fees (Max £250) Max £250K of Mortgage Advance. Free valuation fees for properties valued Max £250K. Help towards valuation fees (Max £310) for properties valued over £250001, Overpayments allowed Minimum loan: £30,000 Portable
   Representative Example: £150,000 mortgage over 25 years initially at 1.55% fixed for 26 months reverting to 5.44% variable for term. 26 monthly payments of £603.43 and 274 monthly payments of £888.10. Total amount payable £259,972.58 includes loan amount, interest of £109,029, valuation fees of £0 and product fees of £799. The overall cost for comparison is 4.8% APRC representative.

   The Hanley have introduced a two-year fixed rate mortgage of 1.55% until 28/02/2021; reverting to an existing borrowers’ rate of 5.44% for the remainder of the mortgage term. This is a competitive rate for the 80% loan to value category (20% deposit). There is a compromise with the benefit of free legal fees worth up to £250 for mortgages up to £250,000 only, and free valuation fees up to £310 versus a booking fee of £799.

   And, to make sure we don’t end on a compromise, this mortgage is open to both those looking to remortgage deal or are looking for a mortgage to buy a new home. It is also portable. 

3. Yorkshire Building Society
   
   

   	APRC	DETAILS
   Yorkshire Building Society 1.63% Initial Rate 2 year fixed rate mortgage 75% LTV Purchase	4.3%	1.63% Fixed to 31/12/2020 Reverting to a 4.25% Discounted Variable to 31/12/2023 (0.74% disc) Reverting to an Existing Borrowers Rate of 4.99% for the remaining term of the mortgage Max Loan to Value: 75% Purchase Fee: £995 on completion Redemption charge: To 31/12/20: 2.5/1.5% Sum Repaid Exit fees: Deferred arrangement fee £90 Fixed Flexible options include: underpayments, overpayments & payment holidays (T&C apply) Free Valuation fees £500 Cashback Minimum loan: £25,000 Maximum loan: £5,000,000
   Representative Example: £150,000 mortgage over 25 years initially at 1.63% fixed for 24 months reverting to 4.25% variable for 36 months and 4.99% variable for term. 24 monthly payments of £609.11, 36 monthly payments of £796.42 and 240 monthly payments of £848.09. Total amount payable £247,966.36 includes loan amount, interest of £96,831, valuation fees of £0 and product fees of £995. The overall cost for comparison is 4.3% APRC representative.

   If you have a smaller deposit of 25% or more (75% loan to value mortgage) then you can apply for Yorkshire Building Society’s 1.63% fixed rate to 31/12/2020 (4.3% APRC). Like the 65% LTV product above this reverts to 4.25% discounted variable to 31/12/2023 and then moves to an existing borrowers’ rate of 4.99% for the remaining term.

   If you are looking to benefit from a reduction on some of the outlays of buying a new home, then this fixed rate mortgage provides a cashback incentive of £500.

   This mortgage also offers flexibility such as the ability to overpay, under pay and have payment holidays subject the terms and conditions of Yorkshire Building Society.

4. First Direct
   
   

   	APRC	DETAILS
   First Direct 1.65% Initial Rate 2 year fixed rate mortgage 75% LTV Purchase & Remortgage	3.7%	1.65% Fixed for 2 years Reverting to an Existing Borrowers Rate of 4.19% for the remaining term of the mortgage Max Loan to Value: 75% Purchase, 75% Remortgage Fees: Booking £490, Up to £400,00 Advance, Booking £980, £400,001 - £800,000 Advance, Booking £1470, £800,001 - £1,000,000 Advance Redemption charge: 1st 2 yrs: 3/2% Mortgage Advance No valuation fees Remortgaging only: free legal fees Overpayments allowed Minimum loan: £10,000 Maximum loan: £1,000,000
   Representative Example: £150,000 mortgage over 25 years initially at 1.65% fixed for 24 months reverting to 4.19% variable for term. 24 monthly payments of £610.53 and 276 monthly payments of £791.95. Total amount payable £233,770.92 includes loan amount, interest of £83,231, valuation fees of £0 and product fees of £490. The overall cost for comparison is 3.7% APRC representative.

   Next is First Direct who have a two-year fixed rate mortgage of 1.65% = (3.7% APRC). This may be an alternative to the Yorkshire Building Society deal for those who need to remortgage as you can apply both for remortgaging or buying a new home. You need to have a deposit of at least 25% (75% loan to value).

   There is an upfront booking fee of £490 - £1,470 (depending on the amount you wish to borrow) to secure the rate for this mortgage.

5. Sainsbury’s Bank
   
   

   	APRC	DETAILS
   Sainsbury’s Bank 1.69% Initial Rate 2 year fixed rate mortgage 85% LTV Purchase	4.1%	1.69% Fixed to 31/12/2020 Reverting to an Existing Borrowers Rate of 4.49% for the remaining term of the mortgage Max Loan to Value: 85% Purchase Fees: Arrangement £995 Redemption charge: To 31/12/20: 2/1% Sum Repaid Exit fees: £100 Free valuation fees £250 cashback Underpayments, Overpayments and Payment holidays allowed Minimum loan: £40,000
   Representative Example: £150,000 mortgage over 25 years initially at 1.69% fixed for 24 months reverting to 4.49% variable for term. 24 monthly payments of £613.39 and 276 monthly payments of £815.44. Total amount payable £240,927.80 includes loan amount, interest of £89,783, valuation fees of £0 and product fees of £995. The overall cost for comparison is 4.1% APRC representative.

   Our next two-year fixed rate mortgage is from Sainsbury’s Bank. If you have a smaller deposit of 15% (85% loan to value) then you can apply for this mortgage, which has a fixed rate to 31/12/2020 of 1.69% (4.1% APRC). This reverts to an existing borrowers’ rate of 4.49% after the initial term.

   There is an arrangement fee for this two-year fixed rate mortgage of £995.

6. Post Office Money®
   
   

   	APRC	DETAILS
   Post Office Money® 1.63% Initial Rate 2 year fixed rate mortgage 75% LTV Purchase	4.3%	2.07% Fixed to 31/01/2021 Reverting to an Existing Borrowers Rate of 4.74% for the remaining term of the mortgage Max Loan to Value: 90% Purchase, 90% Remortgage Fees: No additional product fees Redemption charge: To 31/1/21: 3/2% Sum Repaid Exit fees: Deferred Arrangement Fee £195.00 Free valuation fees. No arrangement fees. Overpayments allowed Minimum loan: £25,001
   Representative Example: £150,000 mortgage over 25 years initially at 2.07% fixed for 25 months reverting to a tracker rate of 4.74% variable for term. 25 monthly payments of £640.91 and 275 monthly payments of £837.07. Total amount payable £246,462.00 includes loan amount, interest of £96,217, valuation fees of £0 and product fees of £0. The overall cost for comparison is 4.3% APRC representative.

   Post Office Money ® have come in with a two-year fixed rate mortgage for those looking for a low deposit mortgage. Furthermore, this is available for those wanting to purchase a new home or if you need to re-mortgage for your existing property. The two-year fixed rate for this mortgage is 2.07% (4.3% APRC) reverting to 4.74% variable rate for the remainder of the mortgage term. This fixed rate mortgage runs until 31/1/21.

   If you have a 10% deposit (90% loan to value mortgage) then you can apply for this mortgage, which also benefits from no additional fees to obtain.

Information and rates correct as of 11/12/2018

Should I fix my mortgage for two years?

If you fix your mortgage for 2 years then your monthly payments will not change for the duration of your 2 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 2 year mortgage, you can commit to spending only the fixed amount for 2 years before your lender is allowed to change your rate. This can be 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!

Who is a 2 year fixed rate mortgage for?

To put it simply, two year mortgages are most suitable to people who would find it hard or impossible to successfully make their mortgage payments their lenders rates were to increase within the next 2 years. Other fixed terms are available, from as little as 2 or 3 years, to as much as 5 or 10 years.

Advantages of a 2 year fixed rate mortgage

A longer period of repayment security can be gained by choosing a longer term fixed rate. As well as security, with a longer term fixed rate you do not need to search for a new mortgage every year, and pay the fees associated with a new mortgage, as you might do with a shorter term fixed mortgage such as a 2 year mortgage. Additionally, if a 2 year term will allow you to reasses your mortgage after two years, whereas a 5 or 10 year mortgage would require you to wait for longer.

Disadvantages of a 2 year fixed rate mortgage

The risk with a longer term fixed rate is that if mortgage rates drops, you could end up paying over the odds. In the current low-rate environment, this is not a large risk, but in this situation you may decide you want to change your mortgage before completing the initial fixed rate term to save money. Fixed rate mortgages usually charge a fee if you want to change or repay your mortgage early, thereofre it's wise to keep these charges in mind when you are deciding which longer term fixed rate mortgage to take. These charges may be prohibitively expensive, particularly in the early years.

When you look at our best buys, you'll see that we have selected the best 2 year fixed rate mortgage deals from across different loan-to-value tiers in order to give a better overview of what's available.

If you can't find a product that's right for you, don't worry - try our quick and easy mortgage search to access a fully comprehensive list of all mortgages.

Finding the best 2 year fixed rate mortgage

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 2 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 have to 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.

Longer fixed rate periods

You may find that the introductory rate on a three year fixed rate mortgage is higher than that of a 2 year fixed rate mortgage, or if you choose a variable rate mortgage. Further you'll find the introductory rates on the 5 to 10 year mortgages are slightly higher still- you might consider this a small price to pay for the security of knowing what your mortgage rates are going to be for several years. Compare the best buy charts of these fixed rate mortgage and variable mortgages:

• 3 year fixed rate mortgages
• 5+ year fixed rate mortgages
• Variable rate and tracker mortgages