The average 2-year fixed mortgage rate has dipped below the 5-year rate for the first time since September 2022, Moneyfactscompare.co.uk research found.
At the start of this month, the average 2-year fixed rate stood at 5.00%, just under the 5-year rate at 5.01%.
This reverses the trend seen since the mini-Budget in September 2022, when rates shot up.
Rates for 2-year deals peaked at 6.85% in August 2023 before dropping back.
The 5-year average reached 6.37% at the same point and has also fallen since.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Millions of borrowers coming off a fixed rate deal this year will be delighted to see fixed mortgage rates on the downward trend, with the average two-year fixed rate dipping below its five-year counterpart for the first time since September 2022.
“Back then, mortgage rates started to rise dramatically, in the aftermath of the ‘mini-Budget’ and it caused mass panic for those struggling to buy their first home.
“Thankfully, time is a healer, with lower rates, much more market stability and a relaxation in stress testing, mortgage prisoners might now be free to refinance.”
Springall added: “The end of the inversion in the two- and five-year fixed rates, if sustained moving onward, will bring borrowers back to a more traditional mortgage market, where it’s more expensive to secure a longer-term fixed mortgage.
“Lenders will no doubt be keeping a close eye on swap rates and react quickly should the path change in the coming weeks.
“This may well be the time for borrowers to act quickly to secure a deal, so it’s wise for them to seek advice to navigate the mortgage maze.”
