Two-Year or Five-Year Fix: Which Mortgage Deal Makes Sense Right Now?

Two-year fixed deals are officially back in fashion - and the numbers prove it.

Fresh data from the Bank of England shows that half of all new mortgages in Q2 were two-year fixes, while only 35%locked in for five years. That’s a complete flip from 2022, when rising rates pushed most borrowers towards long-term security - and when five-year fixes were often the cheaper option.

So… what’s changed?

Shorter terms are winning because borrowers are betting on lower rates

Over the past year, we’ve seen rates nudging down - slowly but consistently. Many Wirral homeowners and first-time buyers are now choosing two-year deals because they want the ability to remortgage again sooner if rates continue to fall.

And honestly? It makes sense.

Two-year and five-year pricing has levelled out. A couple of years ago you’d pay a clear premium for a shorter fix. Today… not so much. With the cost now similar, the flexibility of a shorter term becomes very attractive.

Two-year or Five-year fixed rate? Whats the best option for YOU right now?

But here’s the twist: “Back to 2021 rates” isn’t on the cards

Plenty of people are hoping for the return of those sub-2% headline deals.
But analysts don’t expect us to get anywhere near that. Most forecasts suggest things will settle somewhere around 3.5%in the longer term - still cheaper than we are today, but not 2021-cheap.

And a quick insider note: lenders already price in future Bank Rate cuts when setting fixed mortgages. So the deals we’re seeing now may already include some of the optimism people are waiting for.

Translation?
Today’s rates might actually be the “good rates” you’re holding out for.

What I’m seeing at NG Mortgages

Even 18 months ago, I was putting people into five-year fixes left, right and centre.

Why?

• Rates were still high, as was inflation

• Five-year deals were cheaper

• Everyone wanted stability

Fast forward to today: rates are edging down, two-year pricing is competitive again, and borrowers want options. Most people I’m helping across the Wirral are now choosing shorter deals - hoping to take advantage of better rates in 18–24 months.

Is that optimistic? Maybe. Is it logical? Absolutely.

So… which deal actually makes sense right now?

Both two-year and five-year fixes have their perks - and that’s why this decision isn’t as simple as “everyone’s choosing two years, so I should too.”

A shorter fix gives you flexibility if rates keep drifting down.

A longer fix gives you stability if you’d rather lock things in and ignore the headlines for a while.

What matters is how each option lines up with your plans - whether you’re staying put, moving soon, remortgaging again, or simply trying to keep payments predictable. That’s the bit the comparison sites can’t tell you - but proper advice can.

Need help choosing your next mortgage?

If you’re on the Wirral and weighing up your options, I’ll break it down in plain English - no jargon, no fluff, no pressure. Just mortgages, simplified.