Homebuyers and remortgagers are increasingly opting for two-year fixed-rate mortgages as borrowing costs continue to edge lower, according to new analysis of mortgage search activity.
Figures from Moneyfactscompare.co.uk show demand for two-year fixed deals has risen steadily in recent months, while interest in five-year fixes has declined. The shift has been most pronounced among remortgage borrowers and home movers, suggesting more borrowers expect mortgage rates to continue easing.
The trend comes as two-year fixed rates become increasingly competitive for borrowers with larger deposits, although five-year deals often remain cheaper for those with higher loan-to-value mortgages, leaving many to balance lower monthly costs against longer-term certainty.
Mortgage term demand by buyer type
|
Borrower type |
Term |
Feb 2026 |
→ |
June 2026 |
|
First-time buyer |
2-year fix |
66.3% |
→ |
65.5% |
|
5-year fix |
23.6% |
→ |
18.8% |
|
|
Homemover |
2-year fix |
40.9% |
→ |
52.1% |
|
5-year fix |
34.5% |
→ |
29.9% |
|
|
Remortgage |
2-year fix |
59.5% |
→ |
66.5% |
|
5-year fix |
25.2% |
→ |
20.5% |
Average New Mortgage Rates by term and LTV
|
|
Mortgage |
1 Feb 2026 |
1 April 2026 |
30 Jun 2026 |
|
90% LTV |
2-year fix |
5.10% |
6.15% |
5.76% |
|
5-year fix |
5.09% |
6.00% |
5.60% |
|
|
60% LTV |
2-year fix |
4.21% |
5.39% |
4.99% |
|
5-year fix |
4.53% |
5.43% |
5.25% |
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said: “Borrowers are still reluctant to lock themselves into longer-term deals and instead are favouring the flexibility of a two-year fix as expectations for lower mortgage rates continue to build. However, it isn’t an approach without risk. As recent years have shown time and again, our volatile times can have a rapid effect on borrowing costs.
“The shift is also being supported by pricing. Borrowers with more equity will typically find that two-year fixed rates are now slightly cheaper than comparable five-year deals, making shorter fixes attractive for those looking to refinance again if rates continue to improve.
“However, first-time buyers and borrowers with smaller deposits are facing a different market. At higher loan-to-value ratios, five-year fixed mortgages often continue to offer lower rates than comparable two-year deals, meaning these borrowers must weigh the lower initial cost against the flexibility of a shorter fixed term. That may help explain why first-time buyers appear to be diversifying their choices rather than overwhelmingly switching to two-year fixes.”
