Rate gap between two and five-year fixed mortgages narrowest since 2023
January 13, 2025

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The rate gap between the average two and five-year fixed-rate mortgage has shrunk to its narrowest level in two years, according to a financial information website.
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At the start of January, the average two-year fixed-rate mortgage was 0.23 percentage points higher than the five-year equivalent, Moneyfacts said.
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Across all deposit sizes, the average two-year fixed-rate mortgage on the market at the start of the month had a rate of 5.48%, while the average five-year-fixed-rate was 5.25%.
Moneyfacts said the rate gap between average two and five-year fixed-rate deals at the start of this year was the lowest since January 2023, when it was 0.16% percentage points.
It took the data from the first available day of each month.
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Rachel Springall, a finance expert at Moneyfacts, said: “Borrowers who prefer to lock into a shorter-term mortgage may be pleased to see that the rate gap between the average two and five-year fixed mortgage has dropped to its lowest margin in two years.
“However, it remains the case that the average five-year mortgage rate is lower than its two-year counterpart, which may be more enticing for those who want peace of mind for longer when it comes to their monthly mortgage repayments.
“There was a mix of rises and falls during 2024 and it will be hard to predict where interest rates might go this year, particularly should stubborn inflation persist.”
She added that the average standard variable rate (SVR), which borrowers may end up on when their initial deal ends, was significantly higher than average two and five-year fixed rates, at 7.81%.
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