Shift in mortgage product choice signals renewed market confidence: Twenty7tec

New data from Twenty7tec suggests renewed confidence in the market as more borrowers anticipate that mortgage rates will fall.

In May 2025, nearly half of all mortgage searches and ESIS documents focused on short-term fixes. Of the 1.92 million ESIS documents generated via the platform, 912,378 were for mortgage products fixed for two years or less – accounting for 47.7% of total activity. That’s up from 40.5% in October 2024 and just 22% in September 2022.

Borrower behaviour has continued to shift significantly in recent years. In autumn 2022, as rate hikes began, most borrowers opted for longer-term security, with the majority of ESIS documents focused on three to 10-year fixes.

By December 2022 short-term fixes climbed to 39.2% of the market and in May 2023, as rates peaked, two-year fixes reached 42.8%, with short-term confidence clearly growing.

The rise in short-term fixes also reflects broader market sentiment. With inflation easing and the Bank of England cutting the base rate to 4.25% in May – its first reduction of 2025 – expectations of further rate drops later this year are building. Borrowers appear to be positioning themselves to take advantage of possible future reductions, showing how closely consumer sentiment is tracking wider economic signals.

Nathan Reilly, director at Twenty7tec, said: “These shifts in product choice reflect changing borrower needs. In late 2022, many were looking for longer-term certainty as rates climbed. But by mid-2023, the mood had shifted – more borrowers were backing short-term fixes in the hope that rates would start to fall.

"Borrowers who previously opted for five or 10-year deals during periods of volatility are now prioritising short-term flexibility – betting that mortgage rates may drop within their next refinancing window.

“But what does this mean for advisers? With more customers choosing shorter-term deals, brokers need to be prepared for more frequent refinancing conversations. Now’s the time to ask whether your CRM system is ready – is it helping you stay in regular contact, track the client journey effectively, and keep your pipeline visible?”