The average 2-year fixed mortgage rate for buyers with a 40% deposit came in cheaper than the 5-year fixed rate for the first time since the mini-Budget, according to data from Rightmove.
The average 2-year fixed, 60% loan-to-value (LTV) mortgage rate stood at 4.18%, compared with the 5-year fixed equivalent of 4.19%.
The lowest 2-year fixed rate available was 3.86%, while the lowest 5-year equivalent was 3.89%.
Matt Smith, mortgage expert at Rightmove, said: “For those with the largest deposits, a typical two-year fixed rate mortgage is now lower than the equivalent five-year, the first time we’ve seen this since the mini-Budget.
“This reflects the growing trend that it’s becoming cheaper for lenders to price shorter-term rather than longer-term deals.
“The global tariffs situation has likely accelerated this move. Mass-market average rate trends should gradually follow, and a Bank Rate cut in May will give lenders some more headroom for further rate cuts.”
Toby Leek, NAEA Propertymark president, said: “This is a huge positive for those who qualify for the required loan to value criteria when looking at their mortgage options.
“It demonstrates yet further positivity for people to seek an attractive mortgage deal for themselves.
“While the mortgage market tends to be very reflective of the wider economy, today’s news does show strong market confidence in bringing more attractive deals to the fold.”
Leek added: “When committing to a new mortgage deal, however, it is extremely important to consider all aspects of how you might potentially cope financially when any deal you opt for ends.
“It’s vital to fully consider the savings on a shorter-term deal verses the potential security of a longer-term deal when opting for a fixed term mortgage.”
