Competition in the mortgage market is pushing five-year fixed rates to record lows, new research shows.
According to Moneyfacts.co.uk, the average five-year fixed mortgage rate has now fallen below 3.00% for the first time.
This means homeowners borrowing at a rate of 2.98% would £100 better off per month compared to two years ago.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “Just 20 months ago, the average two-year fixed rate stood at 2.97%. This means that borrowers coming to the end of a two-year fixed deal will find they can now get the extra security of a longer term for a similar price to their old two-year deal.
“Competition remains high in the mortgage market and providers are finding the more traditional two-year fixed rate market becoming saturated with deals. Providers are therefore looking at different avenues to diversify, and the longer term fixed market is just that.
“With the gap between the average two-year fixed rate (2.35%) and the average five-year fixed rate standing at just 0.63% today, borrowers can now opt for the security of a longer term fixed rate with little extra cost to their monthly repayments.
“Borrowers coming to the end of their fixed deal or those who are currently sitting on their SVR should seriously consider opting for a new fixed rate now, as there is no way of telling how low these deals can go.”
