Three-year vs five-year fixed mortgages
Compare when you will need to renew, rather than assuming the lower starting rate wins.
The key difference
A three-year term brings the next renewal sooner. A five-year term holds the agreed fixed rate for longer. The rate available after the shorter term ends is unknown, so today’s two rates cannot establish which will cost less over five years.
| Consideration | Three-year fixed | Five-year fixed |
|---|---|---|
| Next renewal | After three years. | After five years. |
| Comparison horizon | A five-year cost comparison requires an assumption for years four and five. | The initial rate covers the full five-year term, subject to the agreement. |
Questions to take to the lender
- How long do you expect to keep the mortgage unchanged?
- Ask for the cost of exiting each contract before its term ends.
Explore the published products
Sources and scope
General information for comparing options. Product terms and individual eligibility must be confirmed with the lender.
Continue exploring
Fixed vs variable mortgage rates
Compare rate certainty, payment behaviour, and what can change during the term.
Open vs closed mortgages
Compare repayment flexibility and the conditions attached to paying a mortgage off early.