Cost of five-year fixed rate mortgages at two-year high

Christina Hoghton
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Christina Hoghton

Borrowers are still flocking to the security of a five-year fix, despite rates having risen

The average five-year fixed rate has increased for the first time in four months, to its highest point in almost two years, according to Moneyfacts.

The financial information provider said that five-year fixes are now 2.95%, up from 2.88% a year ago.

Darren Cook, head of press at Moneyfacts, said: “The latest figures show that the average five-year fixed mortgage rate has risen by 0.04% this month to now stand at 2.95% (up from 2.91% in October). This marks not only the first time this average has increased for four months, but it is also the highest level seen since December 2016.

“Demand for five-year fixed mortgages has grown, with figures showing that these deals account for 47% of the total remortgage market. This is unsurprising, as many borrowers look for some certainty in a very uncertain economy.

“Not only are borrowers looking for that extra peace of mind, but with lenders keenly pricing their five-year products, there is now very little difference between a traditional two-year product and its longer-term counterpart.”