Gap between two, three and five year fixes closing

by Aaron Strutt

Apr 11 2022

Mortgage lenders have reduced the gap between the price of their cheapest two, three and five-year fixed-rate mortgages.  

As a general rule, banks and building societies' lowest rates tend to be two-year fixed or variable rates, and they charge higher rates if borrowers want to lock into three, five and ten-year mortgages.

However, in recent weeks with shorter-term fixes getting more expensive and longer-term rates not going up as much, the price differential has shifted. In a highly unusual move, Halifax for Intermediaries' five and ten-year fixed mortgages are now cheaper than its two-year products.

Nationwide for Intermediaries is also charging the same rate for its 40% deposit, two, three and five-year fixed-rate mortgages. 

Aaron Strutt, product director at Trinity Financial, says: "The mortgage market is constantly changing, but few would have expected five and ten-year fixes to undercut the cheap two-year deals. The lenders are used to charging a premium for their longer-term mortgages, but this isn't happening nearly as much." 

"Halifax has been offering some of the cheapest fixes for a while, undercutting a lot of the other banks and building societies. Although it has made some significant rate increases in recent weeks, this latest one will prompt even more borrowers to take a five-year fix in favour of the longer-term payment security." 

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation