How to find the best five-year fixed-rate mortgage for you

4th September 2019

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Given all the uncertainties around Brexit - particularly how it’ll affect the housing market - getting a five-year fixed-rate mortgage could seem a really good idea.

We reveal the smart way to find the right deal for you.

What are the advantages?

The biggest advantage of fixing your rate for five years is that you’ll have peace of mind for longer. No matter what happens to the Bank Rate, you’ll know precisely what your mortgage payments will be as they won’t change for five years.

This will allow you to budget for the future with greater accuracy.

What are the disadvantages?

The flipside, of course, is that if interest rates fall you might end up paying over the odds - and potentially for a long time if they don’t rise again.

If you decide to pull out of the deal before it ends, it’s likely that you’ll have to pay an early repayment charge. This could prove costly as it’s charged as a percentage of your loan.

Is a five-year fixed-rate mortgage right for you?

If you’re planning on living in your current home for more than five years, then a five-year fixed-rate mortgage might be worth considering.

This is particularly the case if you want more certainty about being able to afford your mortgage.

You’ll be able to plan your financial future, safe in the knowledge that your monthly mortgage payments won’t change for a specific time.

What are the best five-year fixed-rate mortgage deals?

The other thing you need to take into account is the true cost of the deal. The rate may look amazing, but it’s vital to work out what you’ll actually be paying.

To work out the true cost, you need to take into account monthly payments, and any fees and cashback.

One five-year fixed-rate mortgage might have a high rate but low fees, while another might have a lower rate but higher fees, for example.

The true cost can be a bit of headache to work out, especially if you’ve got lots of mortgages to compare from different lenders. So if you need a hand, get some free advice from a mortgage broker who’ll find the right deal for you.

They’ll also be able to help you decide whether a five-year fixed-rate mortgage is the best choice for you, whatever happens to the economy.

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