Average prices for fixed-rate deals went up by 0.02% in the last month, according to Moneyfacts data, and are ‘slightly lower’ than they were in December 2023.
For borrowers looking for a two-year fixed rate the average rate is now 5.93%. When it comes to five-year fixes, the typical interest rate is 5.50% said Moneyfacts.
The difference between the typical two-year and five-year deal is now 0.43% – Moneyfacts said the gap has not been so wide since October 2023.
It means two-year deals are more expensive than five-year fixed mortgages.
The average standard variable rate (SVR) has remained at 8.18% – this is the rate you will move to when you exit your deal and don’t switch to a new mortgage product.
Meanwhile, Moneyfacts revealed, the average two-year tracker variable mortgage fell to 5.94%.
The number of mortgage products available is a high not seen since February 2008 – Moneyfacts said there were currently 6,629 options.
However, the average shelf-life of a mortgage product fell to 15 days, its lowest since March, down from 28 days a month prior. This means borrowers have a smaller window from which to snap up deals.
Rachel Springall, finance expert at Moneyfacts, said whilst borrowers may feel disheartened to see another consecutive month of mortgage rate rises, the increases were modest – the smallest month-on-month rise this year.
“The incentive to fix for longer remains,” she added, “with the average five-year fixed rate standing 0.43% lower than its two-year counterpart, and the incentive to remortgage is prevalent, as the average SVR stands at 8.18%.
“Lenders spent the first few weeks of May repricing, in reaction to a volatile swap rate market, but the latter end of the month was more subdued, around the time the Government announced there would be a General Election in July.
She added: “Consumers concerned about rising rates would be wise to seek advice from an independent broker to see if they can lock into a deal early, as some will let borrowers do this from three to six months in advance.
“However, there may well be some borrowers sitting on the fence, hoping the market gets a base rate cut this year, but they could still grab a lower rate deal than if they were to sit on their SVR without fixing, such as with a tracker deal.
“Those about to come off a five-year fixed mortgage will have to face the reality that rates are much higher now on an equivalent deal, 2.65% in fact, compared to June 2019, so consumers must ensure they can afford the higher repayments.”
