Our Pick Of The Best Five-Year Fixed Rate Mortgages
Laura Howard,Jo Thornhill
Editor,Editor
Updated: Mar 04, 2024
Fixing in your mortgage rate can hold great appeal. It offers greater security around your monthly household costs, peace of mind and – potentially – even value for money. But what length of fix should you take? For those looking for medium-term security and are not planning a house move in the near future, a five-year deal is one option to consider.
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- Our top 5-year fixed rate mortgages
- What’s our methodology?
- What are fixed rate mortgages?
- What 5-year mortgage deals are available?
- How does the loan to value ratio impact your five-year fixed-rate mortgage?
- What are the benefits of a fixed rate mortgage?
- Are there any drawbacks?
- What alternatives are there to five-year fixed rates?
- How does loan-to-value affect a 5-year fixed-rate mortgage?
- What alternatives are there to a five-year fixed rate mortgage?
Our top 5-year fixed rate mortgages
We worked with our mortgage partner, online broker, Better.co.uk, to identify what we believe to be the best lenders for five-year fixed rate mortgage deals. You’ll find more on how the lenders are ranked with our methodology, below.
It’s important to note that all of these deals require an excellent credit score as well as proven income and sufficient affordability for the loan.
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Santander
5.0
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
*Average rate
4.11%
**Approval time
25 days
***Customer service score
61%
*Average rate
4.11%
**Approval time
25 days
***Customer service score
61%
Why We Picked It
Santander’s average five-year fixed rates are highly competitive and it has faster than average approval times. It has a strong customer service score from Fairer Finance.
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Co-operative Bank for Intermediaries
5.0
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
*Average rate
4.04%
**Approval time
48 days
***Customer service score
44%
*Average rate
4.04%
**Approval time
48 days
***Customer service score
44%
Why We Picked It
Co-operative Bank for Intermediaries has had some super low five-year fixed rates in recent months. But its approval times are slower than average and it has one of the lowest customer experience scores from Fairer Finance.
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HSBC
5.0
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
*Average rate
4.21%
**Approval time
44 days
***Customer service score
60%
*Average rate
4.21%
**Approval time
44 days
***Customer service score
60%
Why We Picked It
HSBC has offered low five-year fixed rates over the past few months. Its average approval time is just above average for the market at 44 days and it has a solid customer service score from Fairer Finance.
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NatWest
4.5
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
*Average rate
4.25%
**Approval time
43 days
***Customer service score
58%
*Average rate
4.25%
**Approval time
43 days
***Customer service score
58%
Why We Picked It
NatWest Bank has offered highly competitive rates over five year fixed terms. It has average approval times and a decent customer service score from Fairer Finance.
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Barclays
4.5
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
*Average rate
4.27%
**Approval time
40 days
***Customer service score
60%
*Average rate
4.27%
**Approval time
40 days
***Customer service score
60%
Why We Picked It
Barclays Bank has offered competitive five-year fixed rates over the past few months. It has slightly quicker than average approval times and a solid customer experience score from Fairer Finance.
* Rate refers to average (median) cost of ‘no-fee’ five-year fixed rate mortgages across all loan to value categories for remortgaging and purchase deals as offered by online broker, Better.co.uk in the last complete three months (data correct at 4 March 2024)
**Average number of days the lender took to process mortgage applications from submission to approval in the last three months. Data for Better.co.uk customers (overall average was 43 days), accurate on 4 March 2024. Approval times vary according to circ*mstances, application and the lender’s current performance, so the average quoted speed may not reflect your own experience.
*** Fairer Finance (customer experience scores) March 2024.
Better.co.uk compares mortgage deals from more than 100 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 frequent change.
What’s our methodology?
We obtained data from our mortgage partner Better.co.uk, showing which lenders have offered the lowest rates on five-year fixed rate mortgage deals over the last three months. We used the median average cost across all deposit levels (data correct from 4 March 2024).
To arrive at our Forbes star ranking, we also considered average mortgage approval times (from submission to offer) over the last three months and customer experience scores as determined by independent data provider, Fairer Finance (correct as of March 2024).
Mortgage offers at all lenders listed are valid for six months.
Bear in mind that these figures are just averages. Exact costs of any mortgage will vary according to your deposit level (or equity you have in your property), credit score, and whether you opt to pay a fee to access a cheaper rate.
Mortgage rates and offers also change frequently – lenders that have presented the best value over the last three months may not present the best value in the next three months.
A mortgage broker, such as Better.co.uk, can provide guidance on which options make the most sense for your circ*mstances.
*Average mortgage costs can vary between sources depending on how the data is gathered.Better.co.uk’s data refers to the average cost of the primary fixed rate mortgage recommendation that is issued to applicants based on their circ*mstances from its 100-plus panel of lenders.
The data counts remortgage and purchase loans but excludes SVRs, adverse credit, self-build and shared ownership. Data is collected at the end of each business day.Better.co.uktargets applicants with a good credit history.
Lower loan-to-values (under 85%) account for a significant portion of its business which can translate into cheaper loan rates. Its average fixed rate costs may therefore appear lower than some others quoted on the market.
What are fixed rate mortgages?
All mortgages come with an interest rate, which is the cost of borrowing from the bank. The rate can either be fixed or variable.
With fixed rate mortgages, the rate you pay remains static for an agreed period. With variable rate mortgages, the rate could go up or down from month to month.
Fixed rate mortgages can last one, two, three, five, seven, ten or even 15 years. Not every lender offers each of those terms – and two and five-year deals tend to be the most popular.
Analysis by the financial regulator the FCA shows that most mortgages (74% or 6.3 million in total) are on fixed rates, and typically they are fixed for between two and five years.
Homeowners wanting a fixed rate must decide how long to fix for. Decisions hinge on factors such as likelihood of moving house in the near future, attitude to risk and expected changes in finances or the economy.
It is also important to remember that, as with any mortgage, your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Government data (sourced from the Bank of England) in the graph below reveals the popularity of fixed rate mortgages (and in particular the growing popularity of five-year fixed rates), compared to variable rates, in recent years.
What 5-year mortgage deals are available?
You can find out the real-time costs of a five-year fixed rate mortgage by using our mortgage tables, powered by our mortgage partner Better.co.uk, below. You’ll need to enter your personal criteria, and whether it’s a new mortgage or a remortgage.
How does the loan to value ratio impact your five-year fixed-rate mortgage?
The loan to value (LTV) ratio is the size of your mortgage borrowing relative to the value of your property. For example, if your home is worth £350,000 and your mortgage is £280,000 then the loan to value ratio is 80%.
The LTV of your mortgage will affect the loan deal you can get and the fixed rate you’ll pay. Lenders tend to offer mortgage rates in LTV bands from 60% LTV, 75% LTV, 80% LTV, 90% LTV and 95% LTV.
Generally speaking the lower your LTV ratio the more competitive the mortgage deal you’ll be offered (which means lower fixed interest rates).
Borrowers with a high LTV (meaning they have a small deposit or equity in their home) will usually pay higher fixed rates.
What are the benefits of a fixed rate mortgage?
With a fixed rate deal homeowners know exactly how much they will pay each month for an extended period of time, making it easier to budget.
Fixed rate mortgages can also prove better value over time if mortgage rates rise during the course of the term. For many homeowners however, the choice to take a fixed rate is based more on the peace of mind that their mortgage payments won’t change.
Are there any drawbacks?
Borrowers won’t benefit from falling interest rates if they are locked into a fixed rate deal. The arrangement fees for taking out a fixed rate mortgage also need consideration. These fees tend to be most expensive on deals with the lowest rates, while the highest-rate fixes can charge no arrangement fee.
There are also stiff financial penalties (early repayment charges or ERCs) for ditching a fixed rate mortgage before the end of the agreed term.
What alternatives are there to five-year fixed rates?
Borrowers looking for a fixed rate mortgage can choose the term of their deal. For example you could choose to fix for two years, three years, five years, 10 years or even longer, depending on the deal. The fixed interest rate will vary depending on the length of the deal.
While longer term fixed rates bring certainty and can help with budgeting you could lose out if interest rates fall.
If you don’t want to fix your mortgage rate you could opt for a tracker rate or discounted variable rate loan. As the name says a tracker deal will track the Bank of England base rate, usually at a set margin above this rate. Discounted rates usually track the lender’s standard variable rate. Both trackers and discounted rates are variable and can rise and fall from month to month.
How does loan-to-value affect a 5-year fixed-rate mortgage?
The loan to value (LTV) ratio is the size of your mortgage borrowing relative to the value of your property. For example, if your home is worth £350,000 and your mortgage is £280,000 then the loan to value ratio is 80%.
The LTV of your mortgage will affect the loan deal you can get and the fixed rate you’ll pay. Lenders tend to offer mortgage rates in LTV bands from 60% LTV, 75% LTV, 80% LTV, 90% LTV and 95% LTV.
Generally speaking the lower your LTV ratio the more competitive the mortgage deal you’ll be offered (which means lower fixed interest rates).
Borrowers with a high LTV (meaning they have a small deposit or equity in their home) will usually pay higher fixed rates.
What alternatives are there to a five-year fixed rate mortgage?
Borrowers looking for a fixed rate mortgage can choose the term of their deal. For example you could choose to fix for two years, three years, five years, 10 years or even longer, depending on the deal. The fixed interest rate will vary depending on the length of the deal.
While longer term fixed rates bring certainty and can help with budgeting you could lose out if interest rates fall.
If you don’t want to fix your mortgage rate you could opt for a tracker rate or discounted variable rate loan. As the name says a tracker deal will track the Bank of England base rate, usually at a set margin above this rate.
Discounted rates usually track the lender’s standard variable rate. Both trackers and discounted rates are variable and can rise and fall from month to month.
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.
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When is a good time to get a five-year fixed rate mortgage?
If you know you’re not going to be moving home for at least five years and if the rates look competitive, then locking into a rate for five years could offer valuable peace of mind. But be aware that there are likely to be early repayment charges if you did want to leave the deal within the five year term.
If you believe interest rates could fall significantly over the coming years you may prefer to opt for a short-term fixed rate so you can benefit from lower rates sooner. But there are no certainties when it comes to interest rates.
How much do fixed rate mortgages cost?
This depends on how long you fix for, expected fluctuations in the bank rate and other factors.
Traditionally, the longer the term, the higher the fixed rate. But in the current market 10-year fixed rates are cheaper than shorter term deals. This is because the market predicts interest rates will fall in the medium to long term.
The mortgage rate you can get, and therefore the cost of your monthly repayments, also depends on the size of your deposit – or how much equity you have in your current home if you are moving or remortgaging. This is known as a Loan-to-Value, or ‘LTV’ for short.
For example, first-time buyers with a £25,000 deposit for a £250,000 property will need a home loan worth 90% of the property price. Their LTV is, therefore, 90%.
But a homeowner looking for a new mortgage deal might have a property worth £500,000, and a mortgage balance of £300,000 left to pay, putting the LTV at 60%. Borrowers with lower LTVs are seen as less risky and can get lower rates.
Interest rate rises over the past 18 months have meant fixed rates are much more costly than in 2021.
Around 1.5 million homes are likely to face higher mortgage costs when they come to remortgage in 2024 as fixed-rate mortgage deals have gone up over the past two years.
About 57% of these borrowers were previously on mortgage rates under 2%, according to figures from the Office for National Statistics and the Bank of England.
An ONS survey, published in September 2023, revealed that almost half (47%) of households reported their rent or mortgage payments had increased in the last six months. A smaller group (5%) reported falling behind on their payments.
How much deposit do I need for a five-year fixed rate mortgage?
How much deposit you need for a five-year fixed rate mortgage depends on the lender and the deal you want. Skipton building society has its Track Record mortgage, which is a five-year fixed rate mortgage for first-time buyers with no cash deposit (certain conditions apply). But the majority of lenders will require at least a 5% deposit (or equity in your home) to get a deal.
As mentioned previously the bigger the deposit or equity you have in your home, typically the more competitive the fixed rate you will be offered.
Can I get a five-year fixed rate mortgage if I’m self-employed?
Getting a mortgage when you’re self-employed can sometimes be a bit more complex, depending on your circ*mstances. As with any mortgage application you’ll have to show proof of income or your accounts. Different lenders will have their own policies and criteria for self-employed mortgage applicants. But generally there will be plenty of mortgage options available, including five-year fixed rate deals.
How do I get a fixed rate mortgage?
All mortgage lenders offer fixed rate deals, so they’re not hard to find. Borrowers can either apply directly with a bank, building society or specialist lender – or use an independent mortgage broker.
Brokers can often access deals not available elsewhere and can help borrowers whose finances are unconventional.
However, keep in mind that some lenders only offer mortgages directly to the borrower, which brokers do not have access to.
Mortgage brokers may charge a fee for their advice, while others will only take a commission from whichever lender you take the deal from.
Will I be approved?
A successful mortgage application will depend on your eligibility criteria – such as how much you earn, your partner’s income if it’s a joint mortgage, and how much other debt is outstanding from credit cards or loans.
Your credit rating is also key. This is based on your history as a borrower and your expected ability to repay a loan in future.
What fees will I pay?
An arrangement fee is commonly payable when you take out a mortgage.
Costs vary but £1,000 is normal for a competitive deal. If there’s no arrangement fee, the interest rate will likely be higher as a result.
Choice is determined largely by whether or not a customer can pay a high upfront cost for the benefit of a lower rate, and therefore a lower monthly mortgage payment.
It’s possible to add an arrangement fee to your mortgage debt rather than pay it upfront. However, this will increase your loan amount and therefore the interest you pay.
You can find out more about mortgage fees at our guide.
A booking fee is a non-refundable one-off cost when you apply for a mortgage. Not all deals come with one, so costs range from zero to a couple of hundred pounds.
Valuation fees can also be payable, which allows lenders to check properties are worth the sum borrowed. But these can also often be waived as an incentive to customers.
A significant fee however is the ‘early repayment charge’ (ERC) – triggered if a borrower quits their fixed-rate mortgage before the end of an agreed term.
Usually, it’s a percentage of the sum outstanding and can be substantial – adding up to thousands of pounds. Tiered arrangement fees, where the percentage reduces with every year of the deal, are commonplace. But anyone expecting to move home in near future should think carefully about the length of their fixed rate mortgage to avoid ERCs altogether.
Account or exit fees may also be charged – in relation to the administrative tasks of creating or closing a mortgage.
Do fixed rate mortgages offer flexibility?
While the name suggests otherwise, fixed rate mortgages aren’t as rigid as the interest rate. It is usually possible to overpay a fixed rate mortgage – often by up to 10% of the total loan each year. This reduces the total interest you pay and helps to clear the balance sooner.
Many deals are also ‘portable’, allowing you to move house and take a mortgage rate with you. If this option is included, however, it is not guaranteed and is subject to eligibility.
Is it worth breaking a fixed rate mortgage?
It can make sense to cut loose from a fixed-rate deal early in some circ*mstances.
Early repayment charges for mortgage deals are typically between 1% and 5% of the outstanding debt.
Lenders might operate a tiered charging system, reducing the exit penalty fee each year as the end of the term draws nearer. Any new mortgage deal needs to generate savings in excess of the fee to make an exit worthwhile.
What happens when the fixed rate ends?
Borrowers are automatically put onto their lender’s Standard Variable Rate (SVR) or equivalent.
The SVR is usually not competitive compared to other deals but it is flexibile. For example, there will be no charge to switch away and you can usually overpay without restriction.
However, most people will benefit from choosing a new deal before they land on their lender’s SVR. Borrowers can secure a new deal around six months in advance of their fixed deal ending.
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