5-Year Fixed Mortgage Calculator UK

A 5-year fixed-rate mortgage is the most popular product on the UK owner-occupier market. The Bank of England's 2024-25 Mortgage Lenders and Administrators Return shows around 55-60% of new residential lending taken on 5-year fixes, against roughly 25-30% on 2-year fixes and the residual on trackers, 10-year fixes, and lifetime products. The maths is straightforward — same amortisation formula as any UK mortgage — but the decision around it has the most consequential trade-offs in personal finance: payment certainty against early-repayment-charge exposure, and a 5-year insulation from Bank Rate moves at the cost of being locked out of refinancing into a lower rate if the cycle turns.

This calculator runs the full 5-year fixed maths against any £ loan amount, rate, term, and LTV, and surfaces the four numbers that actually matter: monthly principal-and-interest, total interest paid over the fix, remaining balance at year 5, and the year-by-year early repayment charge schedule. It also compares the 5-year fixed cost against a 2-year fixed (with a reset in year 3) and against a Bank Rate tracker, across two scenarios — rates falling and rates rising — so you can see which product wins on total cost in each path.

Why UK borrowers fix for 5 years

The 5-year fix is a payment-certainty product first, an interest-rate-management product second. The argument for fixing for 5 years is that you know what your largest household expense will be for the next 60 months — not just the next 24. For a borrower whose first mortgage is at the top end of their affordability envelope, that certainty is worth more than the headline rate saving on a shorter fix. For a borrower with significant income variability (commission-based, freelance, equity-comp-heavy), a 5-year fix removes the reset-risk shock that would otherwise land in years 3, 5, 7, and so on.

The 2026 rate environment shapes the trade-off. The Bank of England's Monetary Policy Committee held Bank Rate at 5.25% through most of 2024, began cutting in August 2024, and Bank Rate now sits in the 4-4.5% range with the Monetary Policy Report's central projection pointing to a slow glide-path lower through 2027-28. That backdrop drives mortgage pricing in two ways: the absolute level of 5-year fixed rates (typically 4-5% across LTV bands for prime borrowers in 2026) and the shape of the SONIA swap curve from which lenders price the product.

Five-year mortgage rates are not a simple function of Bank Rate. They price off the 5-year SONIA swap rate — the market's expectation of average overnight rates over the next 5 years — plus the lender's funding margin, credit spread, capital buffer, and origination cost. When the SONIA curve inverts (markets expecting cuts ahead), 5-year fixes can price BELOW Bank Rate, which is the regime UK borrowers have moved into intermittently through 2025-26. The Bank of England's Inflation Report and the Money Markets Committee statistics on SONIA are the authoritative public references for the underlying curve.

The 5-year fixed maths

The standard UK amortisation formula is M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1] where M is the monthly principal-and-interest payment, P is the loan principal, r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments over the full term.

Worked example: £300,000 loan at 4.5% APR over a 25-year term:

• Monthly rate r = 0.045 / 12 = 0.00375
• Total payments n = 25 × 12 = 300
• (1+r)ⁿ = 1.00375³⁰⁰ = 3.06542
• Monthly P&I M = 300,000 × (0.00375 × 3.06542) / (3.06542 − 1) = £1,667.50/month

Over the 5-year fix, the borrower makes 60 of those payments. Total cash paid in the fix = £1,667.50 × 60 = £100,050. Of that, the principal-repaid portion follows from the amortisation schedule and totals £36,426; the interest-paid portion is the difference, £63,624. The interest fraction in the first 5 years (63.6%) is higher than the back-end of the loan because amortisation is front-loaded on interest — a 5-year fix repays only about 12% of the original principal even though it represents 20% of the term.

The remaining balance at the end of year 5 — the figure that determines refinance pricing and end-of-fix LTV — is computed as balance₆₀ = P × (1+r)⁶⁰ − M × ((1+r)⁶⁰ − 1) / r. Plugging in the numbers: balance₆₀ = £263,574. On a property purchased for £400,000 (£100,000 deposit, 75% starting LTV), that balance translates to 65.9% LTV at the end of year 5 assuming flat house prices, or 56.8% at 3%/year house-price growth — a tier improvement either way, which typically unlocks better refinance pricing at year-5 renewal.

Early Repayment Charges (ERCs)

Every UK 5-year fixed comes with an early repayment charge schedule. The lender charges a fee — expressed as a percentage of the amount being repaid early — if the borrower redeems the mortgage before the end of the fix. ERC exists to protect the lender's funding economics: when you take a 5-year fixed, the lender has typically funded it via 5-year SONIA swaps, and if you redeem early they pay a swap-unwind cost that the ERC offsets.

The typical UK 5-year fixed ERC schedule is a sliding scale of 5% / 4% / 3% / 2% / 1% across years 1-5, applied to the outstanding balance at the time of redemption. For the worked example (£300,000 loan, 4.5% fix), the cash ERC by year of full early redemption is:

• Year 1: 5% × £300,000 = £15,000
• Year 2: 4% × £300,000 = £12,000 (or £11,734 if applied to outstanding balance £293,354)
• Year 3: 3% × £300,000 = £9,000 (or £8,592 if applied to outstanding balance £286,403)
• Year 4: 2% × £300,000 = £6,000 (or £5,583 if applied to outstanding balance £279,132)
• Year 5: 1% × £300,000 = £3,000 (or £2,715 if applied to outstanding balance £271,528)

The ERC headline percentage and the basis (original loan amount vs outstanding balance) varies by lender — always read the Key Facts Illustration (KFI) the broker or lender provides. Some lenders apply the ERC pro-rata across the year (a redemption at month 18 carries 4.5% rather than the year-2 5%); others apply the higher tier until the year ends.

Most UK lenders allow penalty-free overpayments of up to 10% of the original loan amount per year alongside the ERC — for a £300,000 loan, that's £30,000/year of additional principal repayment that doesn't trigger the ERC. For a £500,000 loan it's £50,000/year; for £200,000 it's £20,000/year. Overpayments above the threshold are charged at the headline ERC percentage on the excess. The 10% allowance resets at the lender's product anniversary, not the calendar year.

End of fixed period — what happens next

At the end of the 5-year fix, three things can happen:

1. Refinance to a new product (most common) — the borrower applies for a new fixed or tracker product with the existing lender (a 'product transfer') or remortgages to a new lender. The product transfer route is faster and rarely requires a fresh affordability assessment for like-for-like borrowing; the remortgage route involves a fresh underwriting cycle but can deliver better pricing. The end-of-fix LTV — typically lower than the start-of-fix LTV thanks to amortisation and house-price growth — usually unlocks a better rate tier. Approximately 80-90% of UK 5-year fixed borrowers refinance at end of fix.
2. Drop to the lender's Standard Variable Rate (SVR) — if the borrower does nothing at the end of the fix, the loan automatically reverts to the lender's SVR. Lender SVRs sit typically 2-3 percentage points above the product rate that just ended, making this the most expensive outcome on the lender's book. SVR fallback is never optimal for the borrower; it exists as a default for borrowers who do not arrange refinancing on time. The strong advice from any UK broker is to start the refinance conversation 3-6 months before the end of fix.
3. Sell the property and repay the loan — at the end of the fix, ERC no longer applies, so the loan can be redeemed in full without penalty. This is the ideal exit if you are planning to move home in years 5-6.

A fourth path — porting the mortgage to a new property — lets you move home during the fix without triggering ERC, by transferring the existing loan agreement to a new property at the same product terms. Around 80% of UK lenders offer porting, subject to a fresh affordability check on the new property's price and any additional borrowing. The product rate stays locked at the existing rate for the remainder of the fix.

5-year fixed vs 2-year fixed vs tracker

The 5-year fixed product is one of three main UK options for a 25-year owner-occupier mortgage. The choice between them depends on rate-cycle view, payment-certainty preference, and likelihood of moving home within the fix.

2-year fixed — typically priced 25-50 basis points below 5-year fixed because lenders take less duration risk. The borrower benefits if rates fall in year 3 (refinance to a lower rate); loses if rates rise (refinance to a higher rate). Reset risk in year 3 is the main argument against 2-year fixes for affordability-stretched borrowers.

5-year fixed — payment certainty for 60 months, no reset risk in years 3-4, but exposure to ERC if moving and lockout from refinancing into lower rates if the cycle turns down materially.

Tracker — priced as Bank Rate + a margin (e.g. Bank Rate + 0.99%). Monthly payment moves with Bank Rate, typically within a month of each MPC meeting. Most trackers have no ERC, giving the borrower full flexibility to refinance or repay early. The trade-off is no payment certainty.

5-year total-cost comparison on £300,000 loan / 25-year term, three scenarios:

• 5-year fixed at 4.5% (the base case): monthly £1,667.50, total 5-year cost £100,050, end-of-fix balance £263,574.
• 2-year fixed at 4.25%, then refinance: monthly £1,625.21 for 24 months, then refinance the remaining balance (£285,930) over 23 years (276 months) at the new rate.
  • Scenario A — rates fall, refinance at 3.5%: refi monthly £1,509.74; 5-year total cost = £39,005 + £54,351 = £93,356. Borrower saves ~£6,700 over the 5-year fixed by accepting reset risk and being right about the rate cycle.
  • Scenario B — rates rise, refinance at 5.5%: refi monthly £1,827.92; 5-year total cost = £39,005 + £65,805 = £104,810. Borrower pays ~£4,760 more than the 5-year fixed by accepting reset risk and being wrong about the cycle.
• Tracker at Bank Rate + 0.99% (assume Bank Rate averages 4.25% over the 5 years, so tracker = 5.24%): monthly £1,795.97, total 5-year cost £107,758. The tracker is the most expensive of the three on this central-Bank-Rate scenario, but has zero ERC exposure and zero reset risk because each monthly payment is calculated fresh.

The insight: the 5-year fixed costs more than a successful 2-year fixed roll and less than an unsuccessful one. The decision is not really about £6-7k of 5-year cost differential — it's about whether you can absorb a 12-15% monthly payment jump in year 3 if the cycle goes against you.

Affordability — the FCA stress test

UK mortgage lenders are required by the FCA's Mortgage Conduct of Business (MCOB) handbook to assess affordability under both the product rate and a stress rate — typically the product rate + 1-3 percentage points, reflecting the reversion rate the borrower would face if they failed to refinance at the end of the fix. The Bank of England's previous prescriptive 'SVR + 3%' floor was withdrawn in August 2022, replaced with the FCA's principles-based stress test that lenders apply at their own discretion (most still apply +1% to +3% above product rate).

For a £300,000 loan at the 4.5% 5-year fix, lenders typically stress at 5.5-7.5%. Stressed monthly payments at each level:

• At 5.5% stress: £1,842.26/month (£175 more than product rate)
• At 6.5% stress: £2,025.62/month (£358 more)
• At 7.5% stress: £2,216.97/month (£549 more)

The lender then applies an income-multiple cap to determine borrowing limits — typically 4-4.5x annual gross income, occasionally up to 5.5x for high earners or via specialist 'enhanced' affordability calculations. To borrow £300,000 at the 4.5x cap, the borrower needs gross household income of roughly £66,667; at a 4.0x cap, £75,000.

The 5-year fix carries a small structural advantage on affordability assessment: under the FCA's MCOB framework, lenders are permitted to use a more favourable stress assumption on loans with an initial fixed period of 5 years or longer, because the borrower's payment is locked for the longer window. In practice this can translate to a 5-10% larger maximum loan against the same income on a 5-year fix vs a 2-year fix, which is why the 5-year product often appears as the recommended option in broker-assisted purchases at the top of the affordability envelope.

2026 market context — typical 5-year fixed pricing by LTV

2026 5-year fixed rates by LTV band, prime borrowers (illustrative — actual rates vary by lender, credit score, property type, and product features):

• 60% LTV (40%+ deposit): typically 3.9-4.3% for the best buys
• 75% LTV (25% deposit): typically 4.1-4.5%
• 85% LTV (15% deposit): typically 4.3-4.8%
• 90% LTV (10% deposit): typically 4.5-5.0%
• 95% LTV (5% deposit, Mortgage Guarantee Scheme): typically 4.9-5.5%

The LTV step-down between tiers is typically 15-25 basis points per tier, with the largest step at the 75%/85% boundary (which corresponds to the lender's reduced loss-given-default at moderate LTV). A borrower who can stretch the deposit from 10% to 15% — or pay off £15-20k of the loan in the final months before refinance to step down an LTV band — typically saves 20-40bps on the new rate, which compounds to £4-8k of interest over a 5-year fix on a £300k loan.

For the underlying market data, the Bank of England's Money and Credit statistical release publishes monthly weighted-average effective interest rates on new lending by fixation period, and the BoE/FCA Mortgage Lenders and Administrators Return covers the structural composition of the market by product type, LTV, and term. The FCA's MCOB handbook is the authoritative regulator reference for UK mortgage affordability rules.