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Sam covers personal finance topics, from the best savings rates to the reasons mortgage lenders say no. He enjoys crunching the numbers to help consumers get ahead.
Last year, two-year fixed mortgages were the most common product for UK borrowers, with rates typically lower than the equivalent five-year deals. But will the Middle East conflict disrupt that trend?
Lenders have been repricing mortgages as instability in the Middle East has sent oil prices soaring. Higher oil prices will have an impact on inflation, which could mean the Bank of England decides to cut the base rate at a slower rate than previously forecast.
Here, Which? looks at what has happened to fixed rates so far, what might be next and spotlights six key things to consider before choosing your mortgage term.
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In late February and early March, lenders were slowly cutting rates, but the conflict in the Middle East has shifted the direction of the mortgage market.
Just five days after the conflict began, on 5 March, lenders started increasing fixed rates. Most major UK lenders, including First Direct, NatWest, HSBC and Nationwide Building Society, have since adjusted their mortgage rates.
Borrowers will be disappointed that rates are climbing once again, but the good news is that increases have been relatively modest. Since the start of the month, the average two-year fixed-rate has jumped up by 0.1 of a percentage point, to 4.93%. The average five-year fix has increased by 0.08 percentage points.
To illustrate how rate changes have affected the best deals between 1 March and 11 March, we analysed the best available at the most common loan-to-value ratios for first-time buyers, remortgagers and home movers.
| Lowest two-year rate 1 March | Lowest two-year rate 11 March | Lowest five-year rate 1 March | Lowest five-year rate 11 March | |
| First-time buyers (90% LTV) | 3.97% | 4.1% | 4.24% | 4.3% |
| Homemovers (60% LTV) | 3.51% | 3.72% | 3.75% | 3.89% |
| Remortgagers (60% LTV) | 3.62% | 3.76% | 3.79% | 3.89% |
Source: Moneyfacts data
The table shows that across all borrower types, two-year fixed rates have risen more quickly.
Home movers have seen the largest increase, with the best two-year fixed-rate rising by 0.21 percentage points.
The smallest increase was for the best five-year fixed-rate for first-time buyers at just 0.06 percentage points.
Overall, the best five-year deals are still more expensive than the best two-year deals, but if the trend continues, that may no longer be the case.
Nicholas Mendes, of the mortgage broker John Charcol, says that rates are likely to climb if the uncertain geopolitical climate continues. However, Mendes believes that rates could settle if concern over the price of energy subsides.
This makes it incredibly difficult to forecast where rates will go next, as it is unclear when stability will be restored to the region.
Yorkshire Building Society told us: 'This is a fast-moving situation where no one can predict with certainty what might happen. However, while this is another example of the volatility we have experienced over recent years, we also know that the markets have proved resilient during previous episodes, and the overall picture now is a much more stable one.'
What is easier to predict is the next Bank of England base rate decision. In the current climate, it is unlikely that the base rate will be cut. Instead, the monetary policy committee will be keeping a close eye on the risk of inflation.
In this fast-moving market, the advice from brokers is to lock in a deal. David Hollingworth, of mortgage broker London & Country, says that 'applying for a deal will lock it in but still allow for a review if rates do ease back before completion.'
It's tricky to decide what to do when deciding how long to fix your mortgage for. Here are six things to consider:
If you’re weighing up fixed-rate mortgages, it's important to look at how the monthly repayments differ and if you can afford to pay a premium for fixing for longer.
In our snapshot analysis, first-time buyers, home movers and remortgagers will pay roughly £20 more a month if they choose a five-year deal over a two-year fix at the moment, with the top rates.
Our mortgage fee research has found that the best deals for first-time buyers and home movers often come with a typical fee of £999. This figure rises for those remortgaging. The best rates for these borrowers typically come with fees of more than £1,500.
As a result, some low-rate deals could actually cost more overall than one with a slightly higher rate but no fee.
A mortgage broker can help you avoid these pitfalls. By weighing up rates, fees and incentives such as cashback, they can recommend the most suitable deal for your circumstances.
It is important to establish the level of risk you are willing to take and able to financially cope with.
This is especially true in today's market. A shorter mortgage term gives you the flexibility to switch to a new deal sooner, typically at a lower rate, but it is currently unclear where rates will be in two years.
A longer fix gives you certainty over your monthly payments, but if rates drop during your term, you could miss out on cheaper deals.
In 2025, three-year fixes became more popular. These products offer a middle ground if you're torn between the flexibility of a two-year fixed and the stability of a five-year deal.
You can find competitive rates from this type of mortgage. When we checked on 10 March, 37 three-year fixes offer sub-4% rates, with lenders including First Direct, Santander, Barclays and Nationwide.
Typically, first-time buyers and home movers will pay roughly £10 extra per month for a three-year fix over a two-year term.
The conflict in the Middle East has shown how vulnerable borrowers are to global events.
Two significant dates that UK borrowers may want to consider are 7 November 2028 and 15 August 2029. The first is the date of the next US presidential election, and the latter is the latest date of the next UK general election.
The Truss mini-budget and recent actions of the American administration have shown how government actions can impact the mortgage rates available to UK consumers.
A five-year fix will take you past these two dates, a three-year fix puts you between them, and a two-year fix will have you remortgaging around the time of the next US presidential election.
Of course, it isn't just rates and external factors you should consider when choosing a mortgage term. It is also your own future plans.
If you think you'll move home sooner, a shorter-term deal could be more suitable. This is because you'll likely face early repayment charges if you move home during your fixed term.
Most providers allow you to 'port' your mortgage to another property, but this isn't always cost-effective and can involve meeting specific criteria.
