The cost of the average five-year fixed rate mortgage has fallen significantly over the past year, with many providers launching the lowest ever rates. This competition has seen the average five-year fixed mortgage rate fall below 3.00% for the first time on Moneyfacts.co.uk records.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“The average five-year fixed rate dropping below 3.00% is great news for borrowers. In fact, borrowers opting for the average rate now would be £100* better off per month compared to two years ago.

“Just 20 months ago, the average two-year fixed rate stood at 2.97%. This means that borrowers coming to the end of a two-year fixed deal will find they can now get the extra security of a longer term for a similar price to their old two-year deal.

“Competition remains high in the mortgage market and providers are finding the more traditional two-year fixed rate market becoming saturated with deals. Providers are therefore looking at different avenues to diversify, and the longer term fixed market is just that.

“With the gap between the average two-year fixed rate (2.35%) and the average five-year fixed rate standing at just 0.63% today, borrowers can now opt for the security of a longer term fixed rate with little extra cost to their monthly repayments.

“Borrowers coming to the end of their fixed deal or those who are currently sitting on their SVR should seriously consider opting for a new fixed rate now, as there is no way of telling how low these deals can go.”

*Based on a £200,000 mortgage over a 25-year term on a capital and interest repayment basis.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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