Cheapest mortgage rate is now a two-year fix

The lowest two-year fixed rate currently available on the market is now a two-year fixed rate.

The lowest two-year fix is at 3.86% from Lloyds Bank, available up to 60% LTV with a £999 fee.

The cheapest two-year fix is now 0.60% lower than this time last year, compared with the lowest five-year fix on the market which is down by just 0.17% to 3.96%.

Average two-year fixed rates across the market range from 4.25% at 60% LTV, rising to 5.70% at 95% LTV, while five-year fixes are currently 4.18% on average at 60% LTV and 5.40% at 95% LTV.

Matt Smith, Rightmove's mortgage expert, commented: “Average mortgage rates at the top-end of the market have fallen more quickly than for those with the smallest deposits over the past year. Someone with a 10% deposit is still looking at an average five-year mortgage rate of 4.91%, only slightly down from 4.99% at this time last year.

“By contrast, today someone with a 40% deposit is now looking at an average five-year mortgage rate of 4.20%, down from 4.36% - and we are still seeing some products below the 4% mark in this bracket.

“So while borrowing power has improved for first-time buyers, higher, and slower falling, mortgage rates for those with smaller deposits is still stretching affordability.”