Best 2 year fixed rate mortgage deals

What is a 2 year fixed rate mortgage?

A 2 year fixed rate mortgage is a type of mortgage where the interest rate and monthly repayments stay the same for two years. This means that even if interest rates change, your mortgage payments won’t go up or down during this period.

Choosing a 2 year fixed rate mortgage can be helpful if you want the certainty of knowing exactly how much you’ll pay each month. It’s a popular option for first-time buyers and anyone who wants to plan their finances without worrying about fluctuating interest rates.

The main thing to keep in mind is that you’ll need to remortgage or find a new deal at the end of the two-year period.

Find the best 2 year fixed mortgage rate

If you’re searching for the best 2 year fixed mortgage rates, our team can help you find the most competitive deals. We work with over 90 lenders and can compare options to find the right one for your needs.

To get started, check out our best 2 year fixed mortgage rate table, which shows the lowest rate available today. You can also start your online application to see which mortgages you qualify for.

Before applying, it’s a good idea to check your credit report to make sure everything is correct. The three main credit reference agencies — Equifax, Experian, and TransUnion —offer free and paid services to help you review your credit history. Any errors on your report could affect your ability to secure the best 2 year mortgage rate.

How does a 2 year fixed rate mortgage work?

A 2 year fixed rate mortgage means you’ll have the same mortgage payment for the length of your deal, no matter what happens to interest rates. If rates go up, your payments stay the same, giving you protection against rising costs. However, if interest rates drop, you won’t benefit from the lower rates.

Most 2 year fixed rate mortgage deals come with an early repayment charge (ERC) if you want to leave before the two years are up. This is something to think about if you might move home or change your mortgage sooner than expected.

At the end of the two years, you’ll usually move onto your lender’s standard variable rate (SVR), which is often higher. To avoid paying more than necessary, it’s a good idea to start looking for a new deal before your fixed term ends.

If you’re looking for the best 2 year fixed rate mortgage, you can use our mortgage finder to compare deals. Our expert advisers will help you find the most suitable option for your situation.

2 year fixed rate mortgage eligibility

Lenders have different criteria when deciding whether to approve a 2 year fixed rate mortgage. They will check that you can afford repayments now and in the future. This means they’ll look at your income, spending habits, and any expected changes in your financial situation.

To improve your chances of getting the best 2 year mortgage rates, it’s a good idea to have the following ready:

• 3–6 months of payslips
• 6 months of bank statements
• Proof of any benefits received
• P60 from your employer
• Utility bills
• Tax returns or accounts if you’re self-employed

What happens when your 2 year fixed rate mortgage ends?

The main advantage of a 2 year fixed rate mortgage is that you know exactly what your monthly repayments will be for two years. This makes budgeting easier and protects you from sudden interest rate rises.

Once the two years are up, your lender will move you onto their standard variable rate (SVR). This is usually higher than the fixed rate, meaning your payments could increase. To avoid this, you should remortgage or switch to a new fixed-rate deal when your existing deal ends. 

If you need to leave your mortgage before the two years are over, you’ll likely have to pay an early repayment charge (ERC), which can be costly.

Which is best, a 2 year or 5 year fixed rate mortgage?

2 year fixes can be popular for first time buyers who may be thinking about moving on and/or starting a family in the near future. 5 year deals offer longer-term stability and may appeal to those who’re more settled, or those who are concerned about rates rising in the next few years.

If you want the freedom to switch to another mortgage deal after a relatively short period without Early Repayment Charges, then a 2 year fixed rate mortgage might work best for you. On the other hand, a 5 year fixed rate mortgage gives you peace of mind that your payments won’t change for half a decade. When you give L&C a call, we’ll search the market to find the best fixed mortgage deal for your circumstances.

What is the average 2 year fixed mortgage rate?

The interest rate you are charged depends on the particular mortgage deal you apply for, which itself is determined by a number of factors including your lender, credit history, mortgage length and how much equity or deposit you have. There are thousands of mortgage deals currently on the market and these deals change often, so the average rate will move around from day to day. However, you can use our online Mortgage Finder tool to see the interest rates on current deals you might be eligible for.