Choosing between a 2 or a 5 year fixed rate mortgage.

Fixed rate mortgage deals are the product of choice for many home-buyers and remortgaging homeowners.

Fixed rates offer a level of security not associated with tracker or variable deals. The question for many looking for a mortgage is which product should they choose – a 2 or 5 year fixed term?

With 2 year fixed rate mortgage deals the major attraction is low rates. For a shorter term mortgage lenders are prepared to offer a cheaper deal. At present 2 year fixes are priced at historic lows, and with a 40% deposit rates under 1.5% are achievable from lenders such as the West Brom BS.

On the downside a 2 year fix does not offer as much long term security as a 5 year fixed rate mortgage. With a 5 year fix there is less need to remortgage and so money can be saved on paying remortgage fees which is something else to consider.

While a 5 year fix offers increased security against possible mortgage rate increases, it does come at a higher cost. Lenders price mortgages over 5 year terms at higher levels than shorter term fixes. At present with a 40% deposit 5 year fixed mortgage rates can be found at under 3% which is highly competitive.

Before deciding which deal to take it is important to factor in an early repayment charges, should you take the longer term option but decide to remortgage or move before the term ends you could pay an expensive penalty.

It is vital when comparing mortgage products you consider rates, fees, incentives, early repayment charges and the total amount to be repaid over the term agreed.

As comparing deals on a 'like for like' basis can be a complex business, you are recommended to seek impartial independent mortgage advice to ensure you end up with the most affordable mortgage overall.

Call for advice and a low rate quote on 0800 048 8828.