Meanwhile borrowers on a two-year fixed could also save around £4,704 in the first two years of their term compared to if they had a SVR mortgage.
The calculations were based on an outstanding mortgage balance of £200,000 over a 25-year term with an average five-year fixed rate of 2.81 per cent and an average two-year fixed of 2.58 per cent. This compares to an average SVR of 4.41 per cent.
The research found that that whilst average two, five and 10-year fixed rates had gone up slightly in the past six months there are signs of improvement as rate competition and product volumes are starting to return.
Moneyfacts finance expert Rachel Springall said that whilst switching to a fixed-rate mortgage could save borrowers thousands of pounds the ability to move would be dependent on individual circumstance, such as furlough and level of disposable income.
She also warned that even though some two-year fixed rates were priced as low as 0.99 per cent that it may not be the best deal in terms of “true cost”, therefore borrowers should be wary of “headline grabbing rates”.
According to Moneyfacts, TSB is offering a 0.99 per cent two-year fixed mortgage for remortgage customers at 60 per cent loan-to-value. This inlcudes a £1,495 fee and an includes an incentive package.
Springall added: “Mortgage borrowing remains robust with the Bank of England highlighting the strongest figures seen since records began and this momentum may continue as normality returns and lenders launch new deals to entice new customers.
“As more choice returns to the market and attractive deals grab the spotlight, navigating the mortgage maze could be easier if consumers seek out independent financial advice and take away the potential stresses of applying direct and managing the process to completion.”