According to mortgage search insight gathered by Moneyfacts, the share of people comparing two-year fixed rate mortgages rose from 48.4% in February to 55.9% in June.
Over the same period, demand for five-year fixes fell from 27.7% to 22.9%.
This interest in shorter-term mortgages was mainly seen among remortgagors, where demand rose from 59.5% to 66.5%, while demand from homemovers increased from 40.9% to 52.1%.
Mortgage term demand by buyer type
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|
Borrower type |
Term |
Feb 2026 |
→ |
June 2026 |
|
First-time buyer |
Two-year fix |
66.3% |
→ |
65.5% |
|
Five-year fix |
23.6% |
→ |
18.8% |
|
|
Homemover |
Two-year fix |
40.9% |
→ |
52.1% |
|
Five-year fix |
34.5% |
→ |
29.9% |
|
|
Remortgage |
Two-year fix |
59.5% |
→ |
66.5% |
|
Five-year fix |
25.2% |
→ |
20.5% |
On average, two-year fixed rates for lower loan-to-value (LTV) mortgages are currently cheaper than five-year counterparts. By contrast, five-year fixes are comparatively cheaper for borrowers on higher LTVs and with smaller deposits, which Moneyfacts said left them choosing between cost and flexibility.
Average new mortgage rates by term and LTV
|
|
Mortgage |
1 Feb 2026 |
1 April 2026 |
30 Jun 2026 |
|
90% LTV |
Two-year fix |
5.1% |
6.15% |
5.76% |
|
Five-year fix |
5.09% |
6% |
5.6% |
|
|
60% LTV |
Two-year fix |
4.21% |
5.39% |
4.99% |
|
Five-year fix |
4.53% |
5.43% |
5.25% |
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said: “Borrowers are still reluctant to lock themselves into longer-term deals and instead are favouring the flexibility of a two-year fix as expectations for lower mortgage rates continue to build.”
He said this approach was not without risk, as recent years showed how rapidly volatility could impact borrowing costs.
French added: “The shift is also being supported by pricing. Borrowers with more equity will typically find that two-year fixed rates are now slightly cheaper than comparable five-year deals, making shorter fixes attractive for those looking to refinance again if rates continue to improve.
“However, first-time buyers and borrowers with smaller deposits are facing a different market. At higher LTV ratios, five-year fixed mortgages often continue to offer lower rates than comparable two-year deals, meaning these borrowers must weigh the lower initial cost against the flexibility of a shorter fixed term. That may help explain why first-time buyers appear to be diversifying their choices rather than overwhelmingly switching to two-year fixes.”
