New figures from Moneyfactscompare.co.uk show that 49% of consumers comparing fixed term mortgage products in November were considering 2-year options, with the shorter-term deals proving especially popular among first-time buyers.
Some 70% of first-time buyers selected 2-year fixes on the comparison site, compared with 62% of remortgage customers and 45% of second-time buyers.
The data, covering 1st to 30th November, also shows that 7% of all users looked at 10-year products despite higher overall rates.
Adam French, head of news at Moneyfactscompare.co.uk, said: “It’s not surprising that so many borrowers are considering 2-year deals, given expectations for rates to continue falling in the short to medium term.
“At the beginning of the year, the average 2-year fixed mortgage rate was 5.48%, higher than the typical 5-year deal, which was priced at 5.25%.
“However, 2-year deals have since become cheaper, with average rates now at 4.86% and the average 5-year deal sat at 4.91%, both dipping below 5% earlier this year for the first time since the mini budget in September 2022.
“Despite this, second-time buyers appear to be prioritising stability, predictability, and protection from potential rate volatility over cheaper rates.
“They seem to be more concerned with securing long-term peace of mind, especially if they have higher levels of borrowing and want to shield themselves from unexpected rate hikes.”
Mary-Lou Press, president of NAEA Propertymark, said the trend highlights uncertainty around interest rate movements.
She said: “Today’s figures indicate that consumer confidence is still being shaped by uncertainty around the direction of interest rates.
“The strong shift towards 2-year fixed products reflects a desire among many borrowers, particularly first-time buyers and those remortgaging, to keep their options open should rates continue to ease next year.
“While short-term fixes are attractive in the current climate, it’s notable that a significant share of second-time buyers are opting for longer-term stability.
“This aligns with what our member agents are hearing on the ground: homeowners with larger loans or growing families are prioritising predictability in their monthly payments, even if that means accepting a slightly higher rate.
“Ultimately, borrowers are trying to strike the right balance between flexibility and security. With pricing between 2 and 5-year deals now closer than earlier in the year, professional advice is more important than ever.”
The Moneyfacts Analyser data also underlines shifting behaviour across borrower groups. While 2-year fixes dominate interest from first-time buyers and remortgagers, second-time buyers showed a wider spread of choices, with 41% looking at 2-year deals, 33% at 5-year products and 12% at 10-year terms. Only 3% of all users explored options outside the mainstream 2, 5 and 10-year brackets.
Moneyfacts said the narrowing gap between 2 and 5-year mortgage rates earlier in the year, combined with expectations for future Bank of England cuts, continues to influence both consumer sentiment and product selection. With rates on both 2 and 5-year deals now below 5%, advisors are likely to see continued demand for shorter-term flexibility as the outlook for 2026 becomes clearer.
