How long should you fix your mortgage deal for?

Five-year fixes are very attractive at the moment, as mortgage lenders compete for custom in a jittery housing market.

Brexit turmoil and the upcoming General Election are not helping consumer confidence and many people are looking to try and find some security amongst all of the uncertainty.

The result is that many home-owners, whether first-time buyers or those shopping around for a new deal, are looking to fix their mortgage interest rate for as long as possible.

The rationale is that by the time a five-year fixed deal has run its course, there might be more economic and political stability, but is it a good idea?

Longer fixes are certainly getting cheaper, research by Which? in October 2019 showed that five-year rates have dropped by 0.45% on average over the past year.

In fact, according to Moneyfacts data the gap between a two year fix and a five year fix, currently stands at just 0.31%.

However, it’s important to look at all of the costs associated with the mortgage, not just the interest rate.

Whilst there’s no doubt it’s a good time to get into a longer deal for your mortgage, they aren’t right for everyone.

Fees on a longer fix can be much higher than a shorter fix and whilst you can add them to your mortgage if you don’t want to pay an upfront fee, this means you will pay more interest.

Early repayment charges can also be much higher on a longer-term deal. These are the percentage of your loan that the lender will charge you if you need to get out of the loan early, for example if you sold your home and downsized, went into rented, or moved abroad.

So, if you are planning on moving home in the next five years for example, you might be better off on a shorter deal, or one that you can port without penalties.

One of the best ways to make sure that you get the best possible mortgage for your circumstances is to get expert advice.

Our independent financial advisers will talk to you and carefully research your needs and your future plans.

We source mortgages from the whole of the market and manage the process right through from application until completion.

To find out more just get in touch, we’ll be happy to help.

Book a Consultation Today

    Amethyst Independent Financial Advisers LLP 83 Howard Street, North Shields, NE30 1AF is authorised and regulated by the Financial Conduct Authority

    The Financial Conduct Authority does not regulate taxation and trust advice and some aspects of buy to let mortgages

    We are entered on the Financial Services Register No 623925 at

    Registered in England with No. OC392353

    The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK

    If you have a complaint or dispute with us, you are entitled to make a complaint. We have a complaints procedure that is available on request. If you wish to register a complaint, please contact us either in writing, by telephone or email.

    Please be assured we treat complaints seriously. For your protection if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service ('FOS'). Please see the following link for further details:

    Telephone: 0191 2576704


    83 Howard St, North Shields, NE30 1AF