The difference between the average two-year fixed and five-year fixed mortgage rate is at one of its lowest levels in a decade.

There is now a 0.28 per cent gap between the two mortgage terms, with two-year fixes at an average of 1.4 per cent and five–year fixes at 1.69 per cent, Comparethemarket’s analysis of Bank of England data has shown.

The smallest gap between the two mortgages was recorded in 2008, when the difference was just –0.03 per cent and the last low was in Q4 2019, when it was 0.25 per cent.

Based on an average mortgage debt of £136,273 at 75 per cent loan to value (LTV), a borrower with a two-year fixed mortgage will have monthly repayments of £464, while someone on a five-year fix will repay £483.

Annually, these repayments will come to £5,568 and £5,796 respectively.

Mark Gordon, director of money at Comparethemarket.com, said: “The longer you fix, the longer you are locked into a lower monthly payment.

“Considering the current economic environment and historically low interest rates, knowing what your monthly interest payments are over the long-term can provide greater certainty and peace of mind, making it easier to manage everyday finances.”