Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
Two-Year Fixed Mortgages Gain Popularity as Rates Edge Lower
Homebuyers and remortgagers in the UK are increasingly choosing two-year fixed-rate mortgages, according to new analysis of mortgage search activity reported by Property Industry Eye. Figures from Moneyfactscompare.co.uk show a steady rise in demand for two-year fixed deals in recent months, while interest in five-year fixed-rate mortgages has declined.
The trend is particularly noticeable among remortgage borrowers and home movers. Data from February to June 2026 shows that the proportion of remortgage borrowers opting for two-year fixes increased from 59.5% to 66.5%, while the share choosing five-year fixes fell from 25.2% to 20.5%. Among home movers, demand for two-year fixes rose from 40.9% to 52.1%, with five-year fixes dropping from 34.5% to 29.9%.
For first-time buyers, the shift is less pronounced. The proportion choosing two-year fixes decreased slightly from 66.3% to 65.5%, while those selecting five-year fixes fell from 23.6% to 18.8% over the same period.
The report notes that two-year fixed rates have become more competitive for borrowers with larger deposits. For example, as of 30 June 2026, the average rate for a 60% loan-to-value (LTV) two-year fix was 4.99%, compared to 5.25% for a five-year fix. However, at higher LTVs, five-year fixed mortgages often remain cheaper than two-year deals. At 90% LTV, the average two-year fix was 5.76%, while the five-year fix was 5.60%.
This shift in mortgage preferences may be relevant for letting agents and inventory clerks, as changes in mortgage trends can influence the pace of property transactions and the types of clients entering the rental and sales markets. The evolving landscape may also affect the frequency of property moves and the demand for related services.
Source: Property Industry Eye