For borrowers looking for longer-term security,\u00a0the low rates currently available for\u00a0five-year fixed\u00a0mortgages\u00a0are an attractive proposition. Since the beginning of this year,\u00a0the gap between two-year and five-year fixed rate has fallen 0.6% \u2013\u00a0resulting in\u00a0the lowest difference\u00a0between the different terms\u00a0in seven years.<\/p>\n
The\u00a0average two-year fixed rate has fallen by 0.03% to 2.49% since January,\u00a0while\u00a0the five-year fixed rate has dropped 0.09% to 2.85%.\u00a0\u00a0In real terms for borrowers,\u00a0the difference in monthly repayments is also relatively small, tempting\u00a0those that\u00a0would\u00a0typically settle for a two-year fixed rate to consider paying marginally more per month for longer-term financial stability\u00a0and potentially a significant saving on interest.<\/p>\n
According to Darren Cook, finance expert at Moneyfacts.co.uk,\u00a0the repayments on a \u00a3200,000 mortgage over a 25-year term on the average two-year fixed rate would see the average monthly repayment stand at \u00a3896.23. A borrower choosing the five-year fixed rate would be making an average monthly repayment of \u00a3932.89\u00a0with\u00a0the difference between the two rates being\u00a0just\u00a0\u00a336.66.<\/p>\n
While the competition\u00a0seen\u00a0between lenders in the two-year fixed rate market\u00a0is\u00a0now appearing in the five-year fixed market, is it likely that borrowers could see similar trends in the 10-year fixed market?<\/p>\n
Currently,\u00a0the average ten-year fixed rate is at its lowest level since February last year. On\u00a0a \u00a3200,000 mortgage over a 25-year term on the average ten-year fixed rate the average monthly repayment\u00a0would\u00a0stand at \u00a3948.42, only \u00a315.53 more than the current average five-year fixed rate repayment.<\/p>\n
While the\u00a0average\u00a010-year fixed rate has\u00a0fallen\u00a0by 0.05% since January,\u00a0the\u00a0actual\u00a0gap between the average five-year fixed and the 10-year fixed has increased by 0.04%, indicating perhaps that\u00a0this\u00a0is set to\u00a0widen further.<\/p>\n
However,\u00a0for borrowers\u00a0that don\u2019t need the flexibility of a shorter-term mortgage,\u00a0\u00a0the small increase in monthly repayments between the five and ten year fixed deals will be worth weighing against the long-term financial security of a 10-year fixed rate.<\/p>\n
<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Moneyfacts.co.uk data has revealed that the gap between two-year and five-year fixed rate mortgages is at its lowest since 2012, tempting borrowers to consider fixing for longer. For borrowers looking for longer-term security,\u00a0the low rates currently available for\u00a0five-year fixed\u00a0mortgages\u00a0are an attractive proposition. Since the beginning of this year,\u00a0the gap between two-year and five-year fixed rate… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":8199,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26,6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/5023879"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/comments?post=5023879"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/5023879\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media\/8199"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media?parent=5023879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/categories?post=5023879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/tags?post=5023879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}