You are here: Home - Remortgage - News -

Five-year fixed rate premium at six-year low

0
Written by:
29/01/2019
The mortgage rate gap between two- and five-year fixes has fallen to its lowest since 2013
Five-year fixed rate premium at six-year low

The rate gap between two-year and five-year fixed rate mortgages has fallen to its lowest level in six years, according to Moneyfacts.

It means that borrowers who want to lock into a rate for longer-term security only pay a small premium compared to taking a short-term deal.

Mind the rate gap

The rate gap stands at 0.41% today, down from 0.44% on average for the whole of 2018, which in itself marks a fall from 0.57% in 2017 and from 0.64% in 2016.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “The mortgage rate war may have dulled in comparison to the golden years of cheap funding schemes, but so far this year some of the biggest lenders in the market have taken aim at their pricing to entice new borrowers.

“Since the start of January, several big brands including Barclays, HSBC, Lloyds Bank, NatWest and Santander have all cut rates across their range of two and five-year fixed deals.

“As it stands, the average two-year fixed mortgage rate of 2.50% is just 0.41% lower than the current average five-year deal of 2.91%, so despite average rates overall rising since the record lows seen in 2017 (in October 2017 the average two and five-year fixed rates were 2.21% and 2.76% respectively), the gap is smaller.

“While it is difficult to predict what the mortgage market may face in 2019, it is still positive to see the rate gap shrink, particularly for those borrowers eyeing up a five-year fixed deal who want to avoid any potential interest rates rises for some peace of mind.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your Mortgage Guides

Your Mortgage Award Winners 2018-2019

Download our guide to the best mortgage lenders in the UK

Read More >

  • RT @StudyUCEM: "...the research underlines the long-term strength of bricks and mortar investment to weather such periods." @Your_Mortgage,…
  • "...the research underlines the long-term strength of bricks and mortar investment to weather such periods."… https://t.co/dGt3LTR66F

Read previous post:
New deal allows you to get a mortgage with no deposit

There's a new way for the Bank of Mum and Dad to help their children onto the housing ladder

Close