Need A Two-Year Fixed Rate? Start Your Homework Here
Editorial Note: This content has been independently collected by the Forbes Advisor team and is offered on a non-advised basis. This content is not part of the comparison service provided by Trussle Lab Limited. Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.
Putting some thought and energy into getting the very best mortgage deal can make a huge difference to your household budget for years to come. The difference between a mortgage rate of 2% and 3% on a £200,000 loan (25-year repayment) for example, is £100 a month. That’s cash straight back in your pocket.
One of the most popular mortgage types is a two-year fixed rate. Not only does it bake in some of the cheapest rates on the market to your monthly payments, but it offers relative flexibility too, only charging early repayment penalties for the two-year length of the deal.
What are the best two-year fixed rates?
But which mortgage lenders offer the best rates over this timeframe? In reality, the rate you get will depend mainly on your deposit (the larger it is, the lower the rate). Deals can also change on a daily basis according to the market. You can see what’s available right now, with our live mortgage tables.
But to present an overall picture of the best mortgage lenders in the two-year fixed rate stakes, we asked our mortgage broker partner, Trussle for the average rates lenders have offered over the last three months. There’s much more to this though, which you’ll find in our methodology, below.
We’ve also considered factors such as mortgage offer validity periods and customer service scores.
** Fairer Finance December 2021
* Rate refers to average (median) cost of ‘no-fee’ 2-year fixed rate mortgages at 60% loan to value for remortgaging and purchase deals as offered by online broker, Trussle in the last complete 3 months (data correct at 10 December 2021)
*Trussle compares mortgage deals from more than 90 lenders including all the major high street names. Although note that a handful of lenders including First Direct and Lloyds Bank do not work with brokers. While all information is correct at the time of writing, rates and deals are subject to change.
What’s our methodology?
We obtained data from our mortgage partner Trussle, which shows the top 10 lenders offering the cheapest two-year fixed rates taken as a median average over the last three months (from publication date). We’ve then presented these rates as a ‘cost value score’ out of a maximum of 5.
However, these are only averages. Exact costs will vary according to your deposit level, and whether you choose to pay a fee to access a cheaper rate. A mortgage broker such as Trussle can provide guidance on which option makes the most sense for your circumstances.
Bear in mind also that mortgage offers can change on a daily basis, so which lender presents the best value over the last three months may not present the best value in the next three months. Again, a mortgage broker can help you find the best rate for you when you’re ready to make your move.
To arrive at our Forbes star ratings, we also considered mortgage offer validity period and customer service levels according to data from Fairer Finance (December 2021).
What is a fixed rate mortgage?
All mortgages charge an interest rate which can be either fixed or variable. With fixed rate mortgages, the rate remains static for an agreed period. Two and 5-year fixed rate deals are most common, although terms of 3, 10 and even 15 years are often also available.
While a fixed rate mortgage offers security of monthly payments, you’ll pay stiff penalties for exiting a deal before the end of the agreed term. That’s why you’ll need to think carefully about the length of the fixed term you want before making the commitment.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.