Average two-year fixed mortgage rate sees largest fall in a year

The average two-year fixed mortgage rate significantly fell by 0.37% between January and February, its biggest monthly fall since December 2022.

According to new data published by Moneyfacts, average mortgage rates on both the overall two and five-year fixed rate deals fell for a sixth consecutive month.

Two and five-year fixed rates fell to 5.56% and 5.18%, respectively, meaning the average two-year fixed rate currently stands 0.38% higher than the average five-year equivalent.

Moneyfacts also reported that the average standard variable rate (SVR) fell slightly by 0.01%, to 8.17%, while the average two-year tracker variable mortgage remained at 6.15%.

Finance expert at Moneyfacts, Rachel Springall, commented: “Those borrowers who have waited patiently in recent months to refinance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed rate pricing.

“There have been big expectations for fixed rates to fall further, and whether now is the right time to refinance will come down to an individual’s circumstances. Lenders are in constant review of their ranges, and it is likely rates will fluctuate in the coming weeks due to the noises surrounding future rate expectations.

“The recent observations made by the Bank of England would suggest base rate is unlikely to move for a few months yet, and indeed the Monetary Policy Committee will wait for firm evidence that inflation is under control before even considering a rate cut.”

Moneyfacts also reported that product choice in the mortgage market fell month-on-month for the first time since July 2023, to 5,787 options.

The financial product data provider revealed that the availability of deals at the 95% loan-to-value tier (274) has increased to the highest level since September 2022 (274).

Furthermore, the average shelf-life of a mortgage product rose to 28 days, the highest figure since February 2023 (28 days).

Springall added: “We have seen some product availability drop around other higher LTV brackets, at 90% and 85% month-on-month, so it will be interesting to see whether there will be further declines in these areas over the next few months, or if it’s a short-term adjustment.

“Lenders are actively reviewing their ranges, so product choice could remain volatile, but borrowers must be quick to check deals as the average shelf-life stands at 28 days, the highest in a year.”



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.