Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Shorter-Term Mortgages Remain Popular Despite Falling Rates

UK mortgage borrowers are continuing to favour shorter-term fixed rate mortgages, according to analysis by Moneyfacts. The trend persists even as interest rates begin to fall from recent highs.

Moneyfacts reported that the proportion of people comparing two-year fixed rate mortgages increased from 48.4% in February to 55.9% in June 2026. Over the same period, demand for five-year fixed rate mortgages dropped from 27.7% to 22.9%.

The preference for shorter-term deals was most notable among remortgagors, with demand for two-year fixes rising from 59.5% to 66.5%. Among homemovers, interest in two-year fixes grew from 40.9% to 52.1%. For first-time buyers, the share choosing two-year fixes remained relatively stable, moving from 66.3% to 65.5%, while demand for five-year fixes fell from 23.6% to 18.8%.

Moneyfacts data also showed that, on average, two-year fixed rates for lower loan-to-value (LTV) mortgages are currently cheaper than five-year equivalents. However, for borrowers with higher LTVs and smaller deposits, five-year fixes are comparatively cheaper, presenting a choice between cost and flexibility.

For letting agents and inventory clerks, these shifts in mortgage preferences may influence the types of tenants and landlords entering the market, as well as the frequency of property moves and remortgages. The ongoing preference for shorter-term deals could signal increased mobility among homeowners and landlords, potentially impacting rental demand and property turnover.