Average two-year fixed mortgage surpasses 4%

Mortgages fixed for two years now average a rate above 4% thanks to successive base rate rises by the Bank of England.

Typical 2-year rates now stand at 4.09%, which is the first time they have eclipsed the 4% mark since February 2013, analysis from Moneyfacts.co.uk shows.

Rates have rapidly increased after standing at of 2.34% in December 2021, while they rose by 0.14% since the start of August.

This compares to typical 5-year fixed rates of 4.24%, 10-year fixes of 4.20%, as well as 2-year trackers at 3.33%.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “The differential between two- and five-year average rates has shrunk from 0.30% to 0.15%. The narrowing cost benefit of two year compared to five-year fixed rates may incentivise consumers to consider the added security of fixing payments for a longer term.

“Those wanting to fix for an even lengthier time might be pleased to see that the average 10-year fixed average rate has barely changed since the start of month, inching up by 0.01% to sit at 4.20% today.

“This is actually 0.04% lower than the current average five-year fixed rate. In the volatile swap-rate arena, shorter-term rates of up to two years have recently been more expensive than their longer-term five and ten-year equivalents, indicating risks are seen as greater in the near future than in the longer-term, and therefore feeding into lower pricing for consumers on corresponding mortgage products.

“For consumers hoping to mitigate some of the impact of the ongoing cost of living crisis with a new fixed deal, seeking advice may well be wise as this remains a very changeable landscape, and ensuring they select a product that suits their future plans and priorities is crucial.”

The Bank of England most recently voted to increase the bae rate by 0.50% to 1.75% on 4th August.

The rising cost of 2-year fixes has actually surpassed the increases to the base rate since December.


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