Fixed-rate mortgages plunge to fresh lows

Two, three and five-year fixed rate mortgages have plunged to new lows despite speculation of a base rate rise next year.

Comparison site MoneySuperMarket, which produced the data, has urged homeowners to consider fixing now before rates start to increase.

Its figures also show that the number of 10-year fixed deals is beginning to grow.

The average rate for a five-year fixed is currently 3.45%, while last year it was 4.06%, and in 2012 it was 4.67%.

Shorter-term mortgage deals have followed the same pattern, with the average three-year fixed rate now 3.21%, compared to 4.80% in 2012.

Similarly, the average two-year fixed mortgage rate is now 2.90%, whereas it was 4.48% in 2012.

The total number of 10-year fixed rate products has increased to 41, against 35 last month.

Dan Plant, consumer expert at MoneySuperMarket said: “Mortgage lenders are doing a U-turn, decreasing their rates again after hiking them over the last couple of months.

“Even though the Bank of England base rate hasn’t risen yet, it’s still a case of when rather than if, so any homeowners looking for a cheaper deal should take advantage of the current low rates.

“Many lenders allow mortgage holders to reserve rates available now for up to six months for a small fee, so even those who still have some time left on their current deal can benefit.”

Plant also said that mortgage arrangement fees have fallen over the last five years, especially for five-year fixes, making shopping around even cheaper.