A familiar question for may clients. Should we fix for 2 or 5 years?
The gap between the two has never been lower, with the average 5 year fixed rate shrinking to 2.91% just 0.41% higher than the average 2 year fixed rate.
This is after a number of lenders cut rates in January.
Moneyfacts spokeswoman Rachel Springall said: “While economic uncertainties could potentially put off home movers this year, it is still vital that the market keeps moving, or it could cause a standstill.
“Lenders must consider their levels of risk while also keeping rates low to pull in both buyers and remortgage customers.
“As the two-year fixed market becomes saturated with cheap deals, lenders will no doubt make efforts to compete on five-year deals.
“While it is difficult to predict what the mortgage market may face in 2019, it is still positive to see the rate gap shrink, particularly for those borrowers eyeing up a five-year fixed deal who want to avoid any potential interest rate rises for some peace of mind".
Source: Mortgage Solutions
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