Why 5-year fixed rates are the most popular choice
Five-year fixed rate mortgages have been the most popular mortgage product in the UK for several years. They offer a meaningful period of payment certainty - long enough to plan household finances confidently - without the commitment of a ten-year fix. The rate premium over a two-year fix has narrowed considerably as lenders have competed for five-year business, making the certainty of a five-year term increasingly cost-effective relative to the uncertainty of a shorter deal.
Cost of the remortgage cycle
Choosing a two-year fix over a five-year fix saves on rate in most market conditions, but requires remortgaging every two years. Each remortgage involves arrangement fees, valuation fees, and legal costs - typically £500 to £2,000 depending on the product and lender. Over a ten-year period, a borrower on two-year fixes remortgages five times; a borrower on five-year fixes remortgages twice. The cumulative fee cost, combined with the rate differential, often makes the five-year fix more economical when viewed across a full decade.
Rate certainty in volatile markets
In a market where rates are uncertain or rising, a five-year fix locks in the current rate for the full period regardless of what happens to the Bank of England base rate or lender SVRs. This certainty has a real value that is not captured in a straightforward rate comparison.
5-year fixed rates by borrower type
Residential purchase
5-year fixed rates on residential purchases are available from LTV bands from 60% to 95% (with selected lenders). The most competitive rates apply at 60% and 75% LTV. First-time buyers, home movers, and borrowers remortgaging all access the same five-year fixed product range - the difference is LTV band and income assessment.
Buy-to-let 5-year fixed rates
Five-year fixed rate buy-to-let mortgages are assessed on rental income ICR at a stress rate, typically 5.5-7.5%, regardless of the actual product rate. Portfolio landlords, limited company SPV borrowers, and HMO investors all access five-year fixed products from specialist BTL lenders. The five-year fix is particularly popular for buy-to-let as it stabilises the net yield calculation over the term.
Remortgage to 5-year fixed
Borrowers remortgaging from a two-year fix, or from SVR, to a five-year fixed rate lock in the new rate for five years. The remortgage process typically takes 4-8 weeks and can be arranged 3-6 months in advance of the current deal expiry. Starting the comparison 3 months before expiry ensures the new five-year fix starts the day the old rate ends.
Complex income and 5-year fixed rates
Self-employed borrowers, contractors, and company directors access the same five-year fixed rate products as employed borrowers from specialist lenders who assess income correctly. The income assessment is the specialist element - the fixed rate product itself is standard.
Early repayment charges on 5-year fixed rates
Five-year fixed rate mortgages typically include ERCs of 3-5% of the outstanding loan in year one, declining by approximately 1% per year through the fixed period. On a £300,000 mortgage, a 3% ERC amounts to £9,000. ERCs make early exit from a five-year fix costly in the early years, which is why confirming that a five-year commitment is appropriate for your circumstances is important before taking the product. Life events - moving home, relationship change, or significant income change - can be managed in some cases by porting the mortgage to a new property or by overpaying within the annual allowance.
Choosing the best 5-year fixed rate
The best five-year fixed rate for your specific circumstances depends on your LTV band, loan size, property type, income structure, and whether you need a residential or buy-to-let product. Broker-exclusive five-year fixed rates from lenders on our panel are often below the same lender's direct rates. We compare the full range - including these broker-only products - before making a recommendation.