The difference between the average two-year fixed and five-year fixed mortgage rate is at one of its lowest levels in a decade.
There is now a 0.28 per cent gap between the two mortgage terms, with two-year fixes at an average of 1.4 per cent and five–year fixes at 1.69 per cent, Comparethemarket’s analysis of Bank of England data has shown.
The smallest gap between the two mortgages was recorded in 2008, when the difference was just –0.03 per cent and the last low was in Q4 2019, when it was 0.25 per cent.
Based on an average mortgage debt of £136,273 at 75 per cent loan to value (LTV), a borrower with a two-year fixed mortgage will have monthly repayments of £464, while someone on a five-year fix will repay £483.
Annually, these repayments will come to £5,568 and £5,796 respectively.
Mark Gordon, director of money at Comparethemarket.com, said: “The longer you fix, the longer you are locked into a lower monthly payment.
“Considering the current economic environment and historically low interest rates, knowing what your monthly interest payments are over the long-term can provide greater certainty and peace of mind, making it easier to manage everyday finances.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
