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Five-year fix average goes over 6%

Journalist: Frances Ivens, Telegraph

ended 04. July 2023

Article for Mailonline/ This is Money.

MoneyFacts average five-year fix rate has risen to 6.01% - taking it over 6% for the first time this year.

What are the best five year deals currently in the market? Are five-year deals expected to keep increasing in price? 

Should people take a shorter fix and hope rates come down?

4 responses from the Newspage community

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Editor
Justin Moy
Managing Director at EHF Mortgages
There are still plenty of 5-yr deals below 6% currently available to both residential and buy to let borrowers. However, the trend is worrying, and quick action to secure a new deal is essential. With more lenders offering an option up to 6 months before the expiry of their current deal, it is so important to engage with a mortgage broker to see what is available, and to be ready to make a quick decision. We are seeing a number of loyalty deals for Product Transfers much cheaper than average rates. For example, Nationwide BS are offering existing clients 5.14% fixed for 5 years with a £999 Fee (subject to LTV). Use the experience of a mortgage broker to get the right product for you, and to keep watching for any improvements - they will look to switch you to a cheaper deal if one comes along.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Now isn't the time to fix for longer. Certainty of repayments and the ability to budget could cost you dearly in the long run. Interest rates are inverted over 2, 5 and 10 years with the cheapest of these being 5.89% (Halifax), 5.36% (Virgin) and 4.94% (HSBC) respectively. This is a sign that the market thinks rates will come down and The Plank of England, Andrew Bailey, will have to reverse his devastating rate hikes that have seen so much pain applied to homeowners. The next inflation print should show a significant fall, with fuel, food and energy bills all on the decline. This could be a significant moment for the mortgage market as lenders race to be top of the best buys table.
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Elliott Culley
Director at Switch Mortgage Finance
Unfortunately, under current forecasts, rates still haven't reached their peak. 5-year fixed rates have and continue to be cheaper than 2 year fixes and some clients have decided to fix for longer due to the uncertain outlook. There are still 5-year fixed rates under 6% and customers should remember this is an average rate. The current predictions still show rates should reduce by the end of 2024, albeit not to the low levels seen in the past. So we are seeing more clients opting for a 2-year fixed in the hope rates will be lower when it comes to their next renewal.
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Rob Gill
Managing Director at Altura Mortgage Finance
We're seeing a relentless rise in mortgage rates, driven by steep rises in bond yields, swap rates and other money market rates in pretty much everything sterling-denominated. It feels very much like a market squeeze, logic suggests it has to end eventually, and such squeezes often end with a crash. It certainly doesn't feel like that however to lenders, brokers and borrowers all faced with a market marching ever upwards.