A 2 year fixed rate means your monthly payment will remain the same for 2 years. After 2 years from the point you receive the mortgage, you would move onto the lender’s standard variable rate (SVR), unless you switch to a new deal with the same lender, or remortgage to a new lender.
- At the end of the 2 year period, you will be able to remortgage or move home without paying an early repayment charge (ERC). It may be a good option if you plan to move home in the near future and don’t want to be locked into a mortgage rate for a longer fixed term.
- You need to consider how future interest rates may fluctuate up or down when choosing your fixed rate term. An increase in interest rates, for example, could make a remortgage in 2 years time more expensive.