Compare 5-Year Fixed-Rate Mortgages

Compare the latest interest rates and other important features of 5 year fixed mortgages in the table below.

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Think carefully about securing debt against your home. Your home may be repossessed if you do not keep up repayments on your mortgage

Information written by Holly Bennett Last updated on 01 June 2021.

What is a 5-year fixed-rate mortgage?

It’s a type of mortgage where the interest rate charged on your loan is frozen for five years. So what you pay each month won’t be affected if interest rates rise or fall during that time.

When the deal ends, you’ll move to the lender’s standard variable rate (SVR), unless you remortgage and move to a new deal with your current lender, or with a new one.

» MORE: A simple guide to remortgaging

How to find the best 5-year fixed-rate mortgage

If you’re looking for the best mortgage for your circumstances, use our mortgage table to compare five-year fixed-rate deals. Filter the results by property value, mortgage amount, term length and mortgage type and you'll see how different fees, interest rates and terms from leading lenders compare, including how much you may pay each month.

Advantages of a 5-year fixed-rate mortgage

The main benefit of fixing your mortgage rate for five years is knowing that whatever happens to interest rates, you’ll likely pay the same each month for that period of time, unless you leave the deal early or exceed overpayment limits. This predictability can help you budget and feel peace of mind.

Fixed-rate mortgages often appeal to first-time buyers on a tight monthly budget for their stable costs. And if you get a fixed-rate mortgage when the base interest rate is extremely low, that low rate will stay during those first years of the mortgage.

Disadvantages of a 5-year fixed-rate mortgage

Borrowers pay a premium for fixed-rate deals because fixing rates for any amount of time involves some level of risk for your lender. The longer your fixed-rate period is, the higher the rate of interest is likely to be, as you’re paying for the security of a longer period.

If you need to remortgage to a new deal before your fixed term ends, maybe because you move home or need to make a change to your agreement, you may have to pay a charge. This isn’t usually the case if you have an SVR deal.

Mortgage deals with a fixed rate of interest most commonly have terms from two to five years. A potential downside to a longer, five-year fixed mortgage is that if interest rates fall during that time, your rate won’t reduce in line with them.

Why mortgage interest rates matter for a fixed-rate mortgage

You should consider the total cost of a mortgage for the full term of the deal when comparing mortgages, including lenders’ fees and interest rates. The higher the interest rate, the more your monthly repayments will usually be. And the longer the term, the more interest you’ll pay.

The Bank of England base rate influences mortgage interest rates, but so do the internal policies and strategies of individual banks and building societies.

A mortgage is a big financial commitment that can take many years to repay. So finding the best deal for you is important if the loan is going to be affordable over the long term.

If you do nothing when your fixed-rate mortgage term ends and are moved to your lender’s SVR, it may mean you’ll pay a higher rate of interest than if you switch deals.

Your options when a 5-year fixed-rate mortgage ends

When your fixed-rate deal ends, your lender will automatically move you on to their SVR, which tends to be higher and cost more.

If you don’t want that to happen, you can remortgage by either taking out a new deal with your existing provider, or finding a new lender that offers a better option. If your plan is to remortgage, start looking into it six months before it’s due to end. Your mortgage lender may get in touch before your current term ends to offer another deal.

Be sure when you consider remortgaging that you factor in all fees and costs involved in the new deal, not just the headline rate. This includes any early repayment charge (ERC) you might have to pay for leaving the agreement before the tie-in period has ended, and any mortgage arrangement fees.

If you’re remortgaging and have a low loan-to-value (LTV) ratio, or your home has risen in value over time, you may be able to access more deals and at better rates.

» MORE: 7 remortgaging tips to consider

5-Year Fixed-Rate Mortgages FAQs

Should I get a 5-year fixed-rate mortgage?

A five-year fixed-rate mortgage could be an option if you want to protect your payments from interest rate rises and won’t be looking to change your mortgage before the five-year term ends. Just bear in mind having that security usually costs more.

If you have more of an appetite for risk, and are happy remortgaging to a new deal sooner, a shorter-term deal is an alternative. As getting a fixed rate for longer means greater risk for a lender, they may charge a lower rate of interest for a two-year fixed term, for example. Though consider other factors, too, when comparing mortgages, like arrangement fees and charges for early repayment.

» MORE: Top 2-year fixed mortgage deals

Can I keep my 5-year fixed-rate mortgage?

You can choose to stay with your mortgage lender and remortgage to another fixed-rate term when the existing agreement ends, though the interest rate you’re charged may change. This means your lender transferring all or some of your loan amount to a different product. If you don’t ask to be moved to another deal, you’ll be moved onto your lender’s SVR.

Another option is remortgaging with another lender after the tie-in period of your current deal ends, if you think you could get better fixed-rate terms elsewhere.

You’ll also need to get a new deal if you want to make changes to your mortgage, like increasing the length of the term, borrowing more or removing a name from the agreement. Just be aware that you’ll be assessed for affordability again, when you apply. So it may not be an option if your financial situation has changed since taking out the initial mortgage.

Some lenders allow mortgage porting, which means transferring your current mortgage over to a new property. Although it may still involve product and valuation fees and reapplying for the deal. And there’s no guarantee you'll get an agreement or better terms from your lender than if you applied for a new mortgage elsewhere.

If you’re not sure what’s best for your situation, a mortgage adviser may be able to help you decide.

Can I leave a 5-year fixed-rate mortgage deal early?

If you want to leave a fixed deal early, you may have to pay an ERC. This is usually a percentage of the outstanding balance and decreases over the term of the deal. So this would mean paying a higher percentage charge for leaving at the start of the deal than in the final year – for example, a 5% charge for leaving in year one and a 2% charge for leaving in year four.

Some lenders won’t charge an ERC for moving early if you switch to another deal with them in the last few months of the agreement. And some extend the tie-in period beyond the fixed-rate period. Your mortgage statements should outline the ERC on your current agreement, and how long the tie-in period lasts. If you’re unsure, check with your mortgage provider.

You’ll want to make sure that the cost of switching isn’t higher than the saving you’ll make with the new deal, also taking into account any exit fees.

Can I pay off a fixed-rate mortgage early?

It’s possible to pay off a fixed-rate mortgage ahead of time. But as much as paying a lump sum early to reduce the amount borrowed might save you money in interest over the term, it usually comes with a charge.

How much you’re charged for early repayment will depend on your lender and the terms of your mortgage arrangement. Some lenders charge a fixed fee for early repayment, though it’s usually a percentage of the remaining sum of the mortgage. Longer fixed-rate periods often come with a higher ERC.

So you might want to consider if this is the best use of your available funds, bearing in mind the additional fees involved. You could also look at other ways to pay off your mortgage early, like making overpayments, which might reduce the length of your mortgage term, and reduce the total payment sum of your mortgage. Some lenders set limits on overpayments and others may not allow them at all, so be sure to review the terms and conditions of your mortgage before paying more.

If you’re in a position to make large mortgage overpayments, you may prefer to be on a standard variable rate (SVR), as deals with this type of interest rate tend not to have an ERC.

» MORE: 6 ways to pay off your mortgage early

Do 5-year fixed-rate mortgages offer incentives?

Lenders sometimes include incentives with fixed-rate mortgages, like cashback and free legal fees, or a free valuation. These can amount to sizeable upfront savings, but be sure to look at the interest rate charged and the true cost of the whole package over the full length of the mortgage, when you compare products.

Do I need a good credit score for a fixed-rate mortgage?

Mortgage lenders look at a few things, including your income, deposit amount and regular outgoings, when deciding if they should lend to you, and the deal they’re comfortable offering.

But it’s generally the case that the better your credit score, the higher your chances of getting a good mortgage deal. Your credit score may also help a lender decide how much the loan should be and the interest rate they will charge.

Using a credit reference agency, your lender will see your borrowing and repayment history, including any missed payments, and get an idea of how likely you’ll be to repay them in full and on time.

There are steps you can take to improve your credit score before applying for a mortgage. And while having a bad credit score reduces your likelihood of getting the lowest, most affordable rates, there are lenders that specialise in bad credit mortgages.

» MORE: How to check your credit score

About the author:

Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years, with expertise in insurance, wills and probate, and all things health. Read more

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