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Gap between two, three and five year fixes closing

Aaron Strutt Image

Mortgage lenders have reduced the gap between the price of their cheapest two, three and five-year fixed-rate mortgages.  

As a general rule, banks and building societies' lowest rates tend to be two-year fixed or variable rates, and they charge higher rates if borrowers want to lock into three, five and ten-year mortgages.

However, in recent weeks with shorter-term fixes getting more expensive and longer-term rates not going up as much, the price differential has shifted. In a highly unusual move, Halifax for Intermediaries' five and ten-year fixed mortgages are now cheaper than its two-year products.

Nationwide for Intermediaries is also charging the same rate for its 40% deposit, two, three and five-year fixed-rate mortgages. 

Aaron Strutt, product director at Trinity Financial, says: "The mortgage market is constantly changing, but few would have expected five and ten-year fixes to undercut the cheap two-year deals. The lenders are used to charging a premium for their longer-term mortgages, but this isn't happening nearly as much." 

"Halifax has been offering some of the cheapest fixes for a while, undercutting a lot of the other banks and building societies. Although it has made some significant rate increases in recent weeks, this latest one will prompt even more borrowers to take a five-year fix in favour of the longer-term payment security." 

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation 

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