
That’s according to Moneyfacts, which said in its monthly UK Mortgage Trends Treasury Report that average mortgage rates on the overall two- and five-year fixed rates fell by 0.04 and 0.03 percentage points to 5.48% and 5.25%, respectively.
It means the average two-year fixed rate is 0.23 percentage points higher than the five-year equivalent but the gap is now at its lowest margin since January 2023. The two-year fixed rate has now been higher than the five-year equivalent since October 2022.
Falling rates
At the start of January 2024, the average five-year fixed rate was 5.55%; compared to the 5.25% today – 0.30 percentage points lower.
However, the two-year fixed rates have fallen by a greater amount, dropping by 0.45 percentage points over the last year, down from 5.93% to 5.48%.
Variable rates
The average two-year tracker variable mortgage rate rose to 5.47%, while there was a fall in the typical Standard Variable Rate (SVR) fell to 7.81%. In comparison, the highest recorded was 8.19% during November and December 2023.

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Moneyfacts noted that product choice overall rose month-on-month, to 6,508 options, hugely higher than a year ago (5,899).
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers who prefer to lock into a shorter-term mortgage may be pleased to see that the rate gap between the average two- and five-year fixed mortgage has dropped to its lowest margin in two years (January 2023).
“However, it remains the case that the average five-year mortgage rate is lower than its two-year counterpart, which may be more enticing for those who want peace of mind for longer when it comes to their monthly mortgage repayments.
“There was a mix of rises and falls during 2024 and it will be hard to predict where interest rates might go this year, particularly should stubborn inflation persist. However, there were big expectations for fixed mortgage rates to fall, but this could take longer should the markets be unsettled and if swap rates start to rise.”