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Relatively small difference between two and five-year fixed rates

by Kevin Rose
10 September 2020
New rates from Tesco Bank
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The difference between the average two-year and five-year fixed rate mortgage is at one of the lowest levels seen in over a decade, comparethemarket.com has revealed.

According to the latest Bank of England data, the average two-year fixed mortgage rate is now at 1.40% and a five-year fixed mortgage rate at 1.69% – a difference of 0.28 percentage points. In contrast, the average SVR today is 3.66%.

While the lowest point recorded in the last 10 years was 0.25 percentage points in Q4 2019, the difference has not been seen lower than this since 2008 at -0.03 percentage points.

Based on the average mortgage debt of £135,000 and a 75% loan-to-value, homeowners on a standard variable rate mortgage (SVR) could be paying nearly £2,000 a year more in comparison to those on the average two-year fixed mortgage deal. This is almost £1,700 extra compared to a five-year fix and over £1,000 more compared to the average 10-year fix rate.

There are approximately 800,000 borrowers who have been on a standard variable rate for more than six months.

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© 2018 Trek Publishing Limited. Website design by Bedazzled Media Limited.
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  • MORTGAGES
    • Mortgage type
      • Discount mortgages
      • Fixed rates
      • Fee-free
      • Interest-only
      • Offset
      • Remortgages
      • Trackers
      • Variable rates
    • Conveyancing
    • First time buyers
    • Help to Buy
    • New build
    • Overseas
    • Regulation
    • Self build
    • Shared ownership
  • BRIDGING
  • BTL
    • Consumer BTL
    • HMOs
    • Limited Company BTL
  • COMMERCIAL
    • Asset finance
    • Auction finance
    • Commercial mortgages
    • Development finance
    • Invoice finance
    • SME finance
  • DISTRIBUTION
  • G.I.
  • LATER LIFE
    • Equity release
      • Lifetime mortages
      • Drawdown
    • Pensions
    • Retirement borrowing
  • LOANS
  • PROTECTION
    • Critical illness
    • Income protection
    • Group protection
    • Life cover
    • PMI

© 2018 Trek Publishing Limited. Website design by Bedazzled Media Limited.
Company Number 11335497. Registered Office: Butterick Building Unit K, 38 New Lane, Havant, P09 2ND

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