Are you fixing your mortgage for 2 or 5 years?

For the past several years the majority of people have happily fixed their mortgage rate for 5 years. Since 2020 around 7 in 10 took a 5-year product.

The end of 2022 saw a sharp change. The majority now seem to prefer fixing for only 2 years.

Given that five-year fixed rates are typically cheaper than two year fixes at present, the choice may seem surprising.

According to Moneyfacts, as of April '23 the average 2-year fixed mortgage rate is 5.32%, whilst the average 5-year fix is at 5 per cent. If you qualify for the cheapest rates, then things drop to 4.1% on a two-year fix, and as low as 3.79% on a five-year fix.

Why 2 years then? Homeowners are hedging their bets on interest rates falling over the next couple of years. The expectation seems to be that once inflation subsides, interest rates will come down. Only time will tell.

If you are considering fresh mortgage products please get in touch. Initial enquiries are no obligation, and free.