The mortgage market continues to show signs of improvement, with several lenders now offering five-year fixed rate deals below 5%.

Fixed term deals across the market are beginning to ease, following a harrowing few months of sky-high rates prompted by a series of increases in the Bank of England base rate as part of its efforts to tackle inflation.

The average five-year fixed rate mortgage reached 5.99% last week according to, the first time it has fallen below 6% since early July 2023, with the average two-year fix reaching 6.5%.

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These represent fairly significant drops, considering that the average five-year fix was 6.37% just two months ago, and the average two-year deal sat at 6.85%. It’s another welcome milestone for the mortgage market, following recent news that the market was seeing the biggest choice of mortgage deals since February 2022.

However, average rates are still some way off where they were a year ago, just before the government’s disastrous ‘mini-budget’, where average two-year and five-year fixes sat at 4.24% and 4.33% respectively. A year before that, both rates averaged less than 3%.

Which lenders are offering the best deals?

While the average five-year fix sits just below 6%, provided you have a sizeable deposit or large chunk of equity in your property if remortgaging, it’s possible to find deals offering rates below 5%.

Best remortgage deals

For those seeking to remortgage, First Direct is currently offering a five-year fix at 4.92% with a £490 booking fee and you’ll need a loan to value (LTV) ratio of 60% to qualify. The bank is also offering a 4.97% fix, again with a £490 booking fee, with a slightly more accessible LTV ceiling of 75%.

Yorkshire Building Society is similarly offering a 4.92% fix for five years, for borrowers with a maximum LTV ratio of 75%, but with a much higher £1,495 arrangement fee.

Meanwhile, Nationwide is offering a 4.99% five year fixed rate for borrowers looking to remortgage, again at a maximum LTV ratio of 60%. This deal has a £999 arrangement fee.

For those seeking a two-year fix, one of the best deals currently available is from Barclays, which is offering a 5.28% fix with a £999 arrangement fee if you have a maximum LTV of 60%.

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Best deals for moving home

If you’re purchasing a property and don’t have a mortgage to port across, the best five-year deal for homebuyers is currently from Virgin Money, which is offering 4.82% for a £1,295 fee, with a maximum loan to value ratio of 65%.

The Yorkshire Building Society’s five-year 4.92% offer is also available to home movers. This deal has a £1,495 fee and you’ll need a maximum LTV of 75% to qualify.

Elsewhere, First Direct is offering a 4.97% five-year fixed rate, for a £490 booking fee at a 75% LTV ratio, and Bank of Ireland is offering a deal for the same LTV ratio – but a slightly higher 4.99% rate (and much higher variable rate when the deal ends). The Bank of Ireland deal has a £1,495 arrangement fee.

For a two-year deal, one of the best offers is currently a 5.28% rate from Barclays, with a £999 fee and maximum LTV ratio of 60%.

Should I fix my mortgage now or wait?

Homeowners seeking to remortgage face the same conundrum as they have for the past few months – whether to jump on a better deal now, or take falling rates as a sign to hold out a bit longer, and hopefully bag an ever better fix later on. Data from the Bank of England’s Money and Credit survey shows that remortgage rates – that is, the number of people remortgaging – are at their lowest in 11 years.

With interest rates showing signs of stabilising, the hope is that mortgage rates will continue along their current positive trend – though it is hard to currently say how long this will last, and it’s considered unlikely that they will ever return to the lows seen in 2021.

Whether you can afford to keep waiting for a better fix or would be better served by taking a deal now will depend on your own circumstances – the best thing to do if you are unsure how to proceed is to seek professional mortgage advice.

Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for somewhere to start, you can speak to a Rest Less Mortgages advisor and get high quality advice on residential, retirement interest-only, equity release and buy-to-let mortgages.

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