By clicking a retailer link you consent to third-party cookies that track your onward journey. This enables W? to receive an affiliate commission if you make a purchase, which supports our mission to be the UK's consumer champion.
The average rate on a three-year fixed-rate mortgage is now lower than both two-year and five-year average rates, according to Moneyfacts data.
At the start of June, the average three-year fixed mortgage rate fell to 5.04%, compared to 5.12% for two-year and 5.09% for five-year terms.
So, is a three-year deal worth going for? To help you decide, we’ve taken a closer look at how easy it is to find a three-year fixed-rate, who offers them, plus how the rates compare.
Find the right mortgage using the fee-free service provided by L&C Mortgages
Compare mortgagesIf you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Currently, there are 7,063 residential mortgages available, with 90% of them offering a fixed rate.
The majority of these deals guarantee an interest rate for two or five years. We found that just 11% (875) of fixed-rate deals are available with a three-year term.
However, when we checked, eight out of the 15 largest lenders offer these products. So, although three-year deals are rarer than other terms, there is a solid spread of providers to choose from.
| Barclays | No |
| Co-operative Bank | Yes |
| Coventry Building Society | Yes |
| Halifax | Yes |
| HSBC | No |
| Leeds Building Society | No |
| Lloyds | No |
Source: Moneyfacts 5 June 2025
Here are the top rates on three-year deals for first-time buyers:
| 60% | MPowered Mortgages | n/a | 3.88% | £999 | 6.24% |
| 75% | MPowered Mortgages | n/a | 4.08% | £999 | 6.24% |
| 85% | TSB | 72% | 4.44% | £995 | 6.74% |
| 90% | RECOMMENDED PROVIDER Skipton Building Society | 78% | 4.67% | £1,495 | 5.99% |
| 95% | RECOMMENDED PROVIDER Skipton Building Society | 78% | 4.99% | £995 | 5.99% |
Source: Moneyfacts 5 June 2025. Customer scores are based on a survey of 3,556 members of the public in August-September 2024 and combine overall satisfaction with likelihood to recommend the provider. The average customer score is 70%. To become a Which? Recommended Provider a lender must get a top customer score, consistently offer competitive deals and be fully covered by the Financial Conduct Authority banking standards regime. 'Revert rate' is the standard variable rate (SVR), which is the mortgage rate you'd be transferred onto when your deal ended if it remained unchanged between now and then.
Skipton Building Society stands out for first-time buyers with a smaller deposit. Those with a 10% deposit can achieve a rate of 4.67%, while buyers with a 5% deposit are offered 4.99%.
However, those able to save a 40% deposit and apply for a 60% loan-to-value deal could get a rate under 4% with MPowered Mortgages.
Here are the top three-year deals for those remortgaging:
| 60% | MPowered Mortgages | n/a | 3.92% | £999 | 6.24% |
| 75% | RECOMMENDED PROVIDER First Direct | 75% | 4.15% | £490 | 6.74% |
| 85% | RECOMMENDED PROVIDER Skipton Building Society | 77% | 4.4% | £1,495 | 5.99% |
| 90% | Bank of Ireland | n/a | 4.76% | £999 | 6.49% |
Source: Moneyfacts 5 June 2025. Customer scores are based on a survey of 3,556 members of the public in August-September 2024 and combine overall satisfaction with likelihood to recommend the provider. The average customer score is 70%. To become a Which? Recommended Provider a lender must get a top customer score, consistently offer competitive deals and be fully covered by the Financial Conduct Authority banking standards regime. 'Revert rate' is the standard variable rate (SVR), which is the mortgage rate you'd be transferred onto when your deal ended if it remained unchanged between now and then.
MPowered Mortgages once again has the cheapest rate with a sub-4% deal, but only for those with at least 40% equity in their home.
Although the average three-year fix (5.04%) is now lower than both the average two-year (5.12%) and five-year (5.09%) rates, three-year mortgages currently have less competitive top deals.
The tables show how the best three-year rates for different deposit sizes compare against the top two and five-year deals in the same loan-to-value range.
First-time buyers with a 5% deposit can find the lowest rate with a two-year fix, but if you have a 10% deposit, the lowest rate is found with a five-year term.
| 60% | 3.96% - NatWest | 3.88% - MPowered Mortgages | 3.86% - Barclays |
| 75% | 4.02% - Yorkshire Building Society | 4.08% - MPowered Mortgages | 3.98% - Barclays |
| 85% | 4.22% - Yorkshire Building Society | 4.44% - TSB | 4.3% - First Direct |
| 90% | 4.5% - West Brom Building Society | 4.67% - Skipton Building Society | 4.38% - Leek Building Society |
| 95% | 4.84%- Yorkshire Building Society | 4.99% - Skipton Building Society | 4.89% - Skipton Building Society |
Data from Moneyfacts, correct as of 5 June 2025
Borrowers remortgaging with smaller deposits (and therefore higher LTVs) are likely to find the best rates on five-year fixed deals. Meanwhile, for those with a 60% LTV, the difference between the top two-year and five-year fixed-rate offers is minimal.
| 60% | 3.84% - Halifax | 3.92% - Mpowered Mortgages | 3.86% - Barclays |
| 75% | 4.05% - Halifax | 4.15% - First Direct | 3.98% - Barclays |
| 85% | 4.37% - Halifax | 4.4% - Skipton Building Society | 4.29% - Virgin Money |
| 90% | 4.69% - West Brom Building Society | 4.76% - Bank of Ireland | 4.38% - Leek Building Society |
Data from Moneyfacts, correct as of 5 June 2025
We spoke to Nicholas Mendes, from mortgage broker John Charcol, to understand whether people should consider a three-year mortgage.
In short, he believes 'they are not inherently the best or worst option; their suitability really depends on individual circumstances.'
When choosing your mortgage term, it's important to consider if significant life events are on the horizon. If they are, this may make a shorter mortgage term, with added flexibility, more attractive.
For example, if you think you may want to move soon, then a shorter mortgage term could allow you to avoid early repayment charges.
It's also important to consider your attitude to risk. Mendes describes fixed terms as 'essentially insurance against volatility'.
Therefore, a three-year fix provides a middle ground of when you can search for a new, and potentially cheaper, deal. He also points out that 'they appeal to borrowers who want more breathing room than a two-year deal offers, but do not feel ready to commit to a five-year term, particularly those who expect the market to improve by 2027.'
There’s also the matter of fees. We found that on average the top three-year fixed rate deals have lower arrangement fees than two or five-year terms. Mendes also notes that 'three-year fixes typically come with the lowest average arrangement fees across all three terms.'
Moneyfacts demand data shows that consumers favour shorter mortgage terms, with demand highest for two-year fixed-rate mortgages.
When focusing on demand for those with 90% or 95% LTV demand for two-year fixes increases further.
Three-year fixed-rate mortgages are the third most in demand term length. Demand for this term length peaks for borrowers with 95% LTV.
Mortgages aren't just offered with two, three and five-year terms; you can also choose to fix your mortgage for a longer period of time.
There are 265 mortgage deals with fixed terms exceeding five years. These are grouped into seven, ten or 15-year mortgages.
Seven-year fixed-rate mortgages are currently available from just three lenders.
At present, the deals are offered by Bank of Ireland, Newcastle Building Society, and Vida Home Loans. Bank of Ireland leads the pack with the most competitive rates, 4.7% for borrowers with 85% LTV. This increases to 4.89% for those with 90% LTV.
Virgin Money has previously offered this product in the past, but doesn't currently offer a seven-year fix.
Deals that fix your rate for a decade are available from 10 mortgage providers. Major providers offering these deals include Barclays, Halifax, Lloyds, Santander, Virgin Money and Yorkshire Building Society.
Nationwide offers the market leading rate of 4.39%. However, those with higher LTV ratios will find the cheapest deal, also from Nationwide, is 4.99%.
April Mortgages is currently the only lender offering fixed-rate mortgages with terms of 15 years. While these deals provide certainty and stability over a long period, this comes at a price. Rates for these mortgages range from 5.6% to 6.53%, depending on the LTV ratio.
In terms of fees, April Mortgages sits in the mid-range. Each 15-year deal comes with a £995 completion fee and a £195 booking fee.
