With five-year fixed rate mortgages starting from 3.75% should you take one?

by Aaron Strutt

Dec 07 2025

• Santander UK for Intermediaries — Santander recently launched a five-year fixed deal priced around 3.75% for borrowers with a 40% deposit, with a £999 fee. It is also available for mortgages up to £3 million.

• Nationwide Building Society — Nationwide’s most competitive five-year rate has just been lowered, and it's priced around 3.75% for those with a 40% deposit, with a £1,499 fee. Available for mortgages up to £5 million.

• NatWest for Intermediaries — NatWest lowered its fixed rates last week, and it is among the lenders offering sub-3.85% five-year fixes on certain deals. Arrangement fees start from £995 for borrowers with a 40% deposit, and the maximum loan sizes range from £2 million to £5 million.  

Should you take a 5-year fixed rate, given the Bank of England base rate outlook?

This depends mainly on your risk tolerance, plans, and financial situation. Here are the trade-offs, and how they look now:

Pros of a 5-year fixed mortgage

• Stability and certainty: With a 5-year fixed mortgage, your repayments stay the same for five years — good for budgeting and peace of mind, especially if you plan to stay put. 

• Protection against upward rate swings: If interest rates go up, you’re insulated from increases. 

• Decent fixed-rate pricing now: As shown above, some lenders are offering sub-4% rates — which historically have been a competitive level for 5-year deals. 

Cons of a 5-year fix (especially if rates fall)

• You won’t benefit if rates drop: If the Bank of England base rate and broader mortgage rates fall further, your fixed rate stays the same — so you miss out on potential savings. 

• Less flexibility: You’re locked in for five years; remortgaging or switching might incur early-repayment charges or fees. 

• Opportunity cost: If you expect base rate (and mortgage rates) to fall significantly in the next 1–2 years, a shorter fix or variable/tracker could end up cheaper. 

What’s the recent outlook on base rate and rate movement

The BoE recently held the base rate at 4% but it may well come down to 3.75% in December and again over the next 1–12 months. That said, those expectations appear already reflected in current fixed-rate pricing: many of the sub-4% five-year fixes likely assume markets expect lower rates ahead. 

So — you might well get slightly cheaper deals if rates fall further, but the “market-implied” expectation is that falling rates are already baked into current 5-year fixed deals.

When a 5-year fix makes the most sense — and when to consider alternatives

Choose a 5-year fixed mortgage if:

• You want payment certainty (e.g. for budgeting, if you have a tight household cash flow).

• You plan to stay in your home for at least 5 years, although most mortgages are now portable.

• You’re borrowing a substantial amount or are risk-averse and want to avoid any payment shocks.

• You value simplicity and want to avoid repeated arrangement fees or having to remortgage in a few years.

Consider a shorter fix (2–3 years) or a variable/tracker mortgage if:

• You expect the base rate to fall further in the near future and want to benefit from potentially lower interest rates.

• You may want — or need — to move/remortgage in a few years (so you value flexibility).

• You are comfortable monitoring the market and possibly switching once rates fall.

• You have a buffer (savings or overpayment ability) to cushion against potential rate rises if choosing a tracker.

Aaron Strutt, product director at Trinity Financial, says: "Most borrowers are opting for two-year fixes at the moment as they tend to be cheaper than the five-year fixes. If you preferred certainty, have a stable income and plan to stay in your home for several years — locking in a 5-year fix now, especially with a lender like Santander, Nationwide or NatWest, seems a solid choice.

"If you’re more flexible or willing to take a bit of a gamble (e.g. you might move in a few years, or you expect rates to fall significantly), a 2– or 3-year fix — or a tracker/variable product — may offer lower overall cost (but with more risk). The lowest two-year fixes now start from 3.55% and the best three-year fixes are not much more expensive."

Lending solutions with Trinity Financial

Are you looking to buy a property and require expert advice? We’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience providing creative solutions to secure mortgages for our clients.

Call Trinity Financial on 020 7016 0790 to secure a fixed-rate mortgage or book a consultation

The information contained within was correct at the time of publication but is subject to change.

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