The average two-year fixed rate deal was priced at 2.59 per cent on Friday, 4 June 2021, higher than the 2.02 per cent recorded on the same date a year ago.
The latest rate was within touching distance of the year high. In the period 25 June 2020 to 1 June 2021, the highest average two-year fixed rate was 2.5936 per cent and the lowest, 1.98 per cent.
Over the past two weeks since 27 May 2021, the rate has risen by 0.01 per cent.
Eleanor Williams, finance expert at Moneyfacts, which crunched the data, said: “The recent increase in the overall average two-year fixed mortgage rate may be linked to the resurgence of high LTV mortgage products.
“The number of traditionally higher-rated, high LTV products – from which this overall average rate is fuelled – has risen over the last couple of months, as products both within and outside of the Mortgage Guarantee scheme have been launched.
“However, we are also beginning to see the start of rate competition return to the mortgage sector and have noted a number of providers launch eye-catching sub one per cent deals in recent weeks.
“As to whether the overall average rate will increase further, or whether competition between lenders may bring this down, this remains to be seen — and it may continue to be uncertain while the wider economic outlook stays difficult to predict.”
The average rates were drawn from a subset of the total 4,288 residential mortgage products offered this week, which covered all LTV tiers, fixed and variable rate deals.
Of these, 32 per cent, or 1,356 were two-year fixed products across the LTV range.
Meanwhile 34 per cent, or 1,457 products, were five-year fixed rate deals, at all LTVs.
The last time the two-year average rate dropped was on Friday 14 May, when it was down by a fractional 0.0005 per cent week-on-week, to 2.5668 per cent.