5-Year Fixed Mortgage Rates

Yes, you can pay off a fixed-rate mortgage before it ends, but it’s important to be aware that many lenders will charge an Early Repayment Charge (ERC) if you pay off all or part of your mortgage during the fixed-rate period. The amount of the ERC will typically be a percentage of the outstanding loan balance, and it can be quite significant. Always consult your mortgage agreement or speak with your lender or mortgage advisor to understand the implications of paying off your mortgage early.

Yes, most lenders will allow you to overpay on a fixed-rate mortgage, but there will typically be a limit to how much you can overpay each year without incurring an Early Repayment Charge (ERC). This limit is usually expressed as a percentage of the outstanding loan balance and is commonly set at 10% per year, but this can vary between lenders. Overpaying can reduce your overall term and the amount of interest you pay over the life of the mortgage.

When your five year fixed-rate period is nearing its end, it’s a good time to start exploring your options. If you do nothing, your mortgage will usually revert to your lender’s standard variable rate (SVR), which could be higher than your fixed rate. You can avoid this by remortgaging to a new deal with your current lender or a different one. You should start the process a 6 months before your fixed rate ends to allow enough time for the application and transition.

Your credit score is one of many factors that lenders will consider when deciding whether to approve your mortgage application and what interest rate to offer you. Having a good credit score can increase your chances of being approved and may help you to secure a lower interest rate. However, each lender has its own criteria, and it’s possible to get a mortgage even if your credit score isn’t perfect. It’s always best to speak with a mortgage advisor who can guide you based on your specific circumstances.

The amount you can borrow is typically determined by your income, outgoings, and the lender’s affordability criteria, rather than the type of interest rate on the mortgage. However, a fixed-rate mortgage can provide certainty about your monthly payments for a set period of time, which can make budgeting easier. It’s important to only borrow what you can comfortably afford to repay, taking into consideration potential future interest rate rises.

No, the interest rate on a fixed-rate mortgage is set at the start of the term and remains the same for that term, regardless of changes to the Bank of England base rate. This is one of the key benefits of a fixed-rate mortgage, as it provides certainty about your monthly payments for a set period of time. However, once your fixed-rate term ends, your mortgage will typically revert to the lender’s standard variable rate (SVR), which can change in response to changes in the Bank of England base rate.