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The average two and five-year fixed mortgage rates slipped below 5% in August – their lowest point since September 2022 and a symbolic milestone after both climbed above 6% during the turbulence of 2022 and 2023.
But the fall hasn’t lasted, with averages now rising again. And while these figures highlight the direction of the market, they don’t always reflect the rates available to individual borrowers.
Here, Which? explains why lenders are increasing rates, what average figures really show, and how the best deals have shifted for remortgagers, first-time buyers and movers.
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In recent weeks, average fixed-rate mortgages have gradually moved down. On 1 June, the average two-year fix was 5.09%, while the average five-year fix stood at 5.12%.
By 26 August, both averages had dipped below 5%, with two-year fixes at 4.96% and five-year fixes at 4.99%.
Since then, rates have edged back up as lenders including NatWest and Santander raised prices. Santander, for example, raised a selection of fixed deals by 0.11 percentage points.
One factor behind these changes is swap rates – a key part of the cost for mortgage providers to lend money. These can move sharply in response to global and domestic events.
Adam French at Moneyfacts said: 'What influences swap rates can be quite broad. For example, the two-year swap rate fell from 4.00% to 3.78% in response to the economic shock of President Trump’s ‘liberation day’ tariffs, and the average two-year fixed rate mortgage followed, dropping from 5.33% to 5.29% within days.
'Whereas swap rates rose in response to the latest base rate cut as inflation forecasts increased.'
Banks compete with one another for customers
French added that competition drives changes in pricing. Lenders often cut deals to appear at the top of best buy tables and attract new borrowers, but once they’ve met their targets, they tend to pull back again.
Average rates are useful for showing the overall direction of the market, but they don’t indicate the deal you’ll actually be offered.
Your rate will depend on your circumstances, especially your loan-to-value (LTV). Borrowers with 60% LTV or less are eligible for the lowest deals, while those with smaller deposits or less equity will pay more.
We analysed the top rates of two and five-year fixed-rate mortgages at 60%, 75% and 85% LTV at the start of June and at the end of August. All top rates fell, but some drops were very small.
For those coming to the end of a fixed deal, cuts have been small. The biggest fall was on two-year fixes at 75% LTV, which dropped by 0.14 percentage points. The best five-year fixes at 60% and 75% LTV barely moved, falling by just 0.03 points.
Even August’s 0.25 percentage point base rate cut had little impact, as it was already priced into deals.
The table shows how the top rates for each LTV value have changed since 2 June.
| Loan-to-value | Best two-year fixed-rate 2 June | Best two-year fixed-rate 26 August | Best five-year fixed-rate 2 June | Best five-year fixed-rate 26 August |
|---|---|---|---|---|
| 60% | 3.79% | 3.74% | 3.84% | 3.81% |
| 75% | 4.03% | 3.89% | 3.98% | 3.95% |
| 85% | 4.84% | 4.75% | 4.25% | 4.14% |
Source: Moneyfacts
Correct as of 28/08/2025
The picture is slightly different for first-time buyers. Since 1 June, two-year fixed-rates have fallen more for first-time buyers and home movers than those remortgaging.
Top rates of five-year fixes have also dropped, but these cuts have been smaller, particularly for lower LTV ratios.
The table shows how the top rates for each LTV value have changed since 2 June.
| Loan-to-value | Best two-year fixed-rate 2 June | Best two-year fixed-rate 26 August | Best five-year fixed-rate 2 June | Best five-year fixed-rate 26 August |
|---|---|---|---|---|
| 60% | 3.89% | 3.73% | 3.86% | 3.85% |
| 85% | 4.14% | 3.94% | 4.19% | 4.09% |
| 90% | 4.5% | 4.26% | 4.38% | 4.26% |
| 95% | 4.84% | 4.75% | 4.84% | 4.74% |
Source: Moneyfacts
Correct as of 28/08/25
The average three-year fix has also fallen since June, from 5.04% to 4.91% on 1 August. Since then, the average rate for a three-year term has remained lower than for two and five-year terms.
One likely reason is that there are far fewer three-year products. On 27 August, there were 756 available compared with 2,713 two-year and 2,542 five-year deals. Because two and five-year products are more popular with both lenders and borrowers, they are more likely to include specialist lending options with higher rates, which can push up the overall average.
Despite the lower average, the best three-year rates are still only marginally higher than the cheapest two-year fixes.
| Loan-to-value | Best rate 2 June | Best rate 26 August |
|---|---|---|
| 60% | 3.88% | 3.84% |
| 75% | 3.99% | 3.97% |
| 90% | 4.56% | 4.39% |
Source: Moneyfacts
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Some lenders offer long-term deals of 10 years or more, with the longest stretching to 15 years. Rates currently range between 5.5% and 6.5%, depending on the LTV.
The best long-term fix available is 4.34%. Nationwide also offers a 10-year deal at 4.99% for first-time buyers with a 10% deposit.
These products provide certainty, but at a price. We've found you’ll typically pay around 0.5 percentage points more compared with fixing for two or five years.
