The Moneyfacts average two-year fixed mortgage rate has dropped below it’s five-year counterpart for the first time since September 2022. The latest analysis by Moneyfactscompare.co.uk reveals how rates have changed over time.
| Mortgage market analysis | |||||
| Average mortgage rates | Sep-22 | Aug-23 | Aug-24 | Jul-25 | Today |
| Two-year fixed mortgage | 4.24% | 6.85% | 5.77% | 5.09% | 5.00% |
| Five-year fixed mortgage | 4.33% | 6.37% | 5.38% | 5.08% | 5.01% |
| Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk | |||||
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.
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.”
