The price of five-year fixed-rate mortgages rose for the first time in 4 months and therefore are now, typically, at their most expensive level for almost two years, new data can reveal. But they are they still worth taking into consideration?
The average interest rate on a five-year deal is 2.95%, up from 2.91% in October. The last time five-year deals reached this level was at December 2022, when the average rate was 2.96%. The information was published a week ago by Moneyfacts.
Five-year fixed-rate deals have remained competitive regardless of the increase in the financial institution of England base rate in August, from 0.5% to 0.75%. And they're nearly as low as shorter two-year fixed-rate deals, despite offering security for borrowers for a longer period.
Find out what’s happening with these mortgage deals, the professionals, and cons of fixing for 5 years and just what options you need to obtain the best mortgage deal.
Five-year fixes around the rise
According to Moneyfacts, it’s only been dependent on time until five-year fixed deals began to get more expensive. Average rates have been falling since August’s base rate rise, as lender’s fought to keep their deals as competitive as possible for borrowers.
They’ve only been able to absorb that rate rise for so long – but exactly how dramatic has the rise in average rates been? Not too much, based on Moneyfacts.
A year ago, the typical five-year rate was 2.88%; in 2022, the average rate has crept up just by 0.07 percentage points. The table below shows the recent average five-year fixed rates over the past two years.
Average rate | Dec-16 | Nov-17 | Oct-18 | Nov-18 |
Five-year fixed | 2.96% | 2.88% | 2.91% | 2.95% |
What are the current cheapest five-year deals?
We checked out the cheapest five-year fixed-rate deals which? Money Compare, and also the top-rate goods are significantly less expensive than the average. Minute rates are accurate to 16 November 2022.
For a 75% LTV first-time buyer deal, on a property worth lb165,000 and mortgage of lb125,000, the least expensive fixed-rate deal over five years was offered by Halifax, which charged a preliminary rate of just one.97%. Metro Bank wasn’t far behind having a rate of 1.99%.
The table below shows the least expensive five-year deals for our scenario.
Please observe that the data in the following paragraphs is for information purposes only and doesn't constitute advice. Please make reference to the specific terms & conditions of the checking account provider before investing in any financial products.
Lender | Initial rate | Revert-to rate | APRC |
Sainsbury’s Bank | 1.94% | 4.49% | 3.7% |
Platform | 1.94% | 4.99% | 4% |
Halifax | 1.95% | 4.24% | 3.5% |
Halifax | 1.97% | 4.24% | 3.5% |
Halifax | 1.98% | 4.24% | 3.6% |
What would be the pros and cons of the long fix?
Pros of fixed-rate mortgages
Cons of fixed-rate mortgages
Your home might be repossessed if you do not continue repayments on your mortgage.